CXC chemokine ligand 12 (CXCL12; stromal cell-derived factor 1) is a unique homeostatic chemokine that signals through its cognate receptor, CXCR4. CXCL12/CXCR4 signaling is essential for the formation of blood vessels in the gastrointestinal tract during development, but its contribution to renal development remains unclear. Here, we found that CXCL12-secreting stromal cells surround CXCR4-positive epithelial components of early nephrons and blood vessels in the embryonic kidney. In glomeruli, we observed CXCL12-secreting podocytes in close proximity to CXCR4-positive endothelial cells. Both CXCL12- and CXCR4-deficient kidneys exhibited identical phenotypes; there were no apparent abnormalities in early nephrogenesis or in differentiation of podocytes and tubules, but there was defective formation of blood vessels, including ballooning of the developing glomerular tuft and disorganized patterning of the renal vasculature. To clarify the relative importance of different cellular defects resulting from ablation of CXCL12 and CXCR4, we established endothelial cell-specific CXCR4-deficient mice, which recapitulated the renal phenotypes of conventional CXCR4-deficient mice. We conclude that CXCL12 secreted from stromal cells or podocytes acts on endothelial cells to regulate vascular development in the kidney. These findings suggest new potential therapeutic targets for remodeling the injured kidney.