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The different segments of the nephron and glomerulus in the kidney balance the processes of water homeostasis, solute recovery, blood filtration, and metabolite excretion. When segment function is disrupted, a range of pathological features are presented. Little is known about nephron patterning during embryogenesis. In this study, we demonstrate that the early nephron is patterned by a gradient in β-catenin activity along the axis of the nephron tubule. By modifying β-catenin activity, we force cells within nephrons to differentiate according to the imposed β-catenin activity level, thereby causing spatial shifts in nephron segments. The β-catenin signalling gradient interacts with the BMP pathway which, through PTEN/PI3K/AKT signalling, antagonises β-catenin activity and promotes segment identities associated with low β-catenin activity. β-catenin activity and PI3K signalling also integrate with Notch signalling to control segmentation: modulating β-catenin activity or PI3K rescues segment identities normally lost by inhibition of Notch. Our data therefore identifies a molecular network for nephron patterning. DOI: http://dx.doi.org/10.7554/eLife.04000.001, eLife digest The main function of the kidney is to filter blood to remove waste and regulate the amount of water and salt in the body. Structures in the kidney—called nephrons—do much of this work and blood is filtered in a part of each nephron called the glomerulus. The substances filtered out of the blood move into a series of ‘tubules’, another part of the nephrons, from where water and soluble substances are reabsorbed or excreted as the body requires. If the nephrons do not work correctly, it can lead to a wide range of health problems—from abnormal water and salt loss to dangerously high blood pressure. For organs and tissues to develop in an embryo, signalling pathways help cells to communicate with each other. These pathways control what type of cells the embryonic cells become and also help neighbouring cells work together to form specialised structures with particular functions. Much is unknown about how the nephron develops, including how its different structures coordinate their development with each other so that they form in the right position in the nephron. A protein called beta-catenin was already known to play an important role in the signalling pathways that trigger the earliest stages of nephron formation. Lindström et al. further investigated how this protein helps the nephron to develop by using a wide range of techniques, including growing genetically altered mouse kidneys in culture and capturing images of the developing nephrons with time-lapse microscopy. The combined results reveal that the levels of beta-catenin activity coordinate the development of the different structures in the nephron. The beta-catenin protein is not equally active in all parts of the nephron; instead, it forms a gradient of different activity levels. The highest levels of beta-catenin activity occur in the tubules at the furthest end of the developing nephron; this activity gradually decreases along the length of the nephron, and the glomerulus itself lacks beta-catenin activity altogether. Experimentally manipulating the levels of beta-catenin at different points along the nephron caused those cells to take on the wrong identity, causing parts of the nephron to form in the wrong place. Lindström et al. were also able to establish that the signalling pathway controlled by beta-catenin activity interacts with three other well-known signalling pathways as part of a network that controls nephron development. More research is required to find out which signal activates beta-catenin in the first place and from where in the kidney this signal comes. It also remains to be discovered how a particular cell in the tubule interprets the exact activities of the different signals to give the cell its specific identity for that place in the nephron. A better understanding of these sorts of processes will eventually help build new kidneys for people with kidney failure. DOI: http://dx.doi.org/10.7554/eLife.04000.002