Yap is a transcriptional co-activator that regulates cell proliferation and apoptosis downstream of the Hippo kinase pathway. We investigated Yap function during mouse kidney development using a conditional knockout strategy that specifically inactivated Yap within the nephrogenic lineage. We found that Yap is essential for nephron induction and morphogenesis, surprisingly, in a manner independent of regulation of cell proliferation and apoptosis. We used microarray analysis to identify a suite of novel Yap-dependent genes that function during nephron formation and have been implicated in morphogenesis. Previous in vitro studies have indicated that Yap can respond to mechanical stresses in cultured cells downstream of the small GTPases RhoA. We find that tissue-specific inactivation of the Rho GTPase Cdc42 causes a severe defect in nephrogenesis that strikingly phenocopies loss of Yap. Ablation of Cdc42 decreases nuclear localization of Yap, leading to a reduction of Yap-dependent gene expression. We propose that Yap responds to Cdc42-dependent signals in nephron progenitor cells to activate a genetic program required to shape the functioning nephron.