The formation of the proper number of functional nephrons requires a delicate balance between renal progenitor cell self-renewal and differentiation. The molecular factors that regulate the dramatic expansion of the progenitor cell pool and differentiation of these cells into nephron precursor structures (renal vesicles) are not well understood. Here we show that Sall1, a nuclear transcription factor, is required to maintain the stemness of nephron progenitor cells. Transcriptional profiling of Sall1 mutant cells revealed a striking pattern, marked by the reduction of progenitor genes and amplified expression of renal vesicle differentiation genes. These global changes in gene expression were accompanied by ectopic differentiation at E12.5 and depletion of Six2+Cited1+ cap mesenchyme progenitor cells. These findings highlight a novel role for Sall1 in maintaining the stemness of the progenitor cell pool by restraining their differentiation into renal vesicles.