The heterogeneous cellular composition of the mammalian renal collecting duct enables regulation of fluid, electrolytes, and acid-base homeostasis, but the molecular mechanism of its development has yet to be elucidated. The Notch signaling pathway is involved in cell fate determination and has been implicated in proximal-distal patterning in the mammalian kidney. To investigate the role of Notch signaling in renal collecting duct development, we generated mice in which Mind bomb-1 (Mib1), an E3 ubiquitin ligase required for the initiation of Notch signaling, was specifically inactivated in the ureteric bud of the developing kidney. Mice lacking Mib1 in the renal collecting duct displayed increased urinary production, decreased urinary osmolality, progressive hydronephrosis, sodium wasting, and a severe urinary concentrating defect manifested as nephrogenic diabetes insipidus. Histological analysis revealed a diminished number of principal cells and corresponding increase in the number of intercalated cells. Transgenic overexpression of Notch intracellular domain reversed the altered cellular composition of mutant renal collecting duct, with principal cells occupying the entire region. Our data demonstrate that Notch signaling is required for the development of the mammalian renal collecting duct and principal cell differentiation and indicate that pathway dysregulation may contribute to distal renal tubular disorders.