Development of the metanephric kidney is an experimental model system to analyze interactions between mesenchymal and epithelial cells and mesenchymal-epithelial transition. To study the underlying genetic mechanisms we employed organ culture and differential display PCR to identify genes regulated upon induction of mesenchymal cells. One of the genes found encodes the secreted frizzled related protein 2 (sFRP2) that is upregulated within 2 days of in vitro development. In vivo sFRP2 expression was likewise found in mesenchymal condensates and subsequent epithelial structures. Detailed in situ hybridization analysis revealed sFRP2 expression during development of the eye, brain, neural tube, craniofacial mesenchyme, joints, testis, pancreas and below the epithelia of oesophagus, aorta and ureter where smooth muscles develop. In a comparative analysis transcripts of the related sFRP1 and sFRP4 genes were frequently found in the same tissues as sFRP2 with their expression domains overlapping in some instances, but mutually exclusive in others. While sFRP1 is specifically expressed in the embryonic metanephros, eye, brain, teeth, salivary gland and small intestine, there is only weak expression of sFRP4 except for the developing teeth, eye and salivary gland. The interpretation of the highly specific spatial and temporal expression patterns of sFRP genes will partly depend on a better functional understanding of the interaction between wnt, fz and sFRP family members. Nevertheless, sFRP genes must play quite distinct roles in the morphogenesis of several organ systems.