Nephron progenitor cells differentiate to form nephrons during embryonic kidney development. In contrast, self-renewal maintains progenitor numbers and premature depletion leads to impaired kidney function. Here we analyze the PI3K pathway as a point of convergence for the multiple pathways that are known to control self-renewal in the kidney. We demonstrate that a reduction in PI3K signaling triggers premature differentiation of the progenitors and activates a differentiation program that precedes the mesenchymal-to-epithelial transition through ectopic activation of the β-catenin pathway. Therefore, the combined output of PI3K and other pathways fine-tunes the balance between self-renewal and differentiation in nephron progenitors.