The RNA-binding molecule Bicaudal-C regulates embryonic development in Drosophila and Xenopus. Interestingly, mouse mutants of Bicaudal-C do not show early patterning defects, but instead develop polycystic kidney disease (PKD). To further investigate the molecular mechanism of Bicaudal-C in kidney development, we analyzed its function in the developing amphibian pronephros. Bicaudal-C mRNA was present in the epithelial structures of the Xenopus pronephros, the tubules and the duct, but not the glomus. Inhibition of the translation of endogenous Bicaudal-C with antisense morpholino oligomers (xBic-C-MO) led to a PKD-like phenotype in Xenopus. Embryos lacking Bicaudal-C developed generalized edemas and dilated pronephric tubules and ducts. This phenotype was caused by impaired differentiation of the pronephros. Molecular markers specifically expressed in the late distal tubule were absent in xBic-C-MO-injected embryos. Furthermore, Bicaudal-C was not required for primary cilia formation, an important organelle affected in PKD. These data support the idea that Bicaudal-C functions downstream or parallel of a cilia-regulated signaling pathway. This pathway is required for terminal differentiation of the late distal tubule of the Xenopus pronephros and regulates renal epithelial cell differentiation, which--when disrupted--results in PKD.