We have previously described an endogenous renal MSC (ER-MSC) population isolated from the adult mouse kidney (1). Here we show that ER-MSCs are enriched in the CD45-CD31-Sca-1+CD24lo fraction of total kidney isolates with regional enrichment in the papilla. We investigated the epithelial potential of ER-MSCs by microinjecting GFP+ ER-MSC into the neonatal kidney (P1) under ultrasound guidance. After 3-7 days, injected ER-MSCs differentially integrated into Aqp2+ collecting ducts and expressed epithelial markers. There was no similar integration into the proximal tubules (Aqp1) or Loops of Henle (Umod) and integration was confined to the medullar / papillary region. No such epithelial integration was observed upon injection of GFP+ bone marrow-derived MSCs. Surprisingly, GFP+ fraction isolated from adult Hoxb7-GFP mice also gave rise to MSCs in culture with a classical MSC immunophenotype (markers), differentiation capacity and a higher clonogenicity. Delivery of this Hoxb7GFP+-derived MSCs into the neonatal model also demonstrated specific collecting duct tubular integration. In vitro, these cells formed epithelial networks in collagen I and, when co-cultured with MDCK, were able to integrate into epithelial cysts. FACS sorting of GFP and EpCAM revealed a neonatal GFP+/lo interstitial population that was absent in the kidney of the adult animals, raising the possibility that this is the initial source of this MSC population. This study challenges both our understanding of the origin of the collecting duct and our understanding of the presence of stem/progenitor cells within that compartment of the kidney. This novel stem cell population may play a role in collecting duct maturation, turnover or repair.