Epigenetic regulation of gene expression plays a crucial role allowing for self-renewal and differentiation of stem and progenitor populations during organogenesis. The mammalian kidney maintains a population of self-renewing stem cells that differentiate to give rise to thousands of nephrons, which are the functional units that carry out filtration to maintain physiological homeostasis. The Polycomb Repressive Complex 2 (PRC2) epigenetically represses gene expression during development by placing the H3K27me3 mark on histone H3 at promoter and enhancer sites resulting in gene silencing. To understand the role of PRC2 in nephron differentiation, we conditionally inactivated the Eed gene, which encodes a non-redundant component of the PRC2 complex, in nephron progenitor cells. Resultant kidneys were smaller and showed premature loss of progenitor cells. The progenitors in Eed mutant mice that were induced to differentiate did not develop into properly formed nephrons. Lhx1, normally expressed in the renal; vesicle, was over-expressed in kidneys of Eed mutant mice. PRC2 has a crucial role in suppressing the expression of genes that maintain the progenitor state, to allow nephron differentiation to proceed.