The differentiation and organization of the embryonic renal vasculature is a crucial event in renal development. To study this process, we developed a serum-free in vitro model of renal microvessel development. Mouse embryonic kidney explants, when embedded specifically in type I collagen, demonstrate outgrowth of microvascular structures when stimulated by the phorbol ester 12-O-tetradecanoylphorbol 13-acetate (TPA, 10-50 ng/ml). Other polypeptide growth factors stimulated little, if any, microvessel outgrowth from the explants. Similar outgrowths were not observed when other embryonic tissue explants were used. The number of microvessels observed depended on the gestational age of the explants. We hypothesize that TPA induces the in situ differentiation of metanephric mesenchymal cells into endothelial cell precursors and that specific matrix proteins and cell-matrix interactions are necessary for the organization of these precursors into microvessels. Our model will allow us to examine in detail the responsiveness of metanephric kidney cells to both growth factors and extracellular matrix molecules and to understand how they influence renal endothelial cell differentiation.