Histone deacetylases (HDACs) regulate a broad range of biological processes through removal of acetyl groups from histones as well as non-histone proteins. Our previous studies showed that Hdac1 and Hdac2 are bound to promoters of key renal developmental regulators and that HDAC activity is required for embryonic kidney gene expression. However, the existence of many HDAC isoforms in embryonic kidneys raises questions concerning the possible specificity or redundancy of their functions. We report here that targeted deletion of both the Hdac1 and Hdac2 genes from the ureteric bud (UB) cell lineage of mice causes bilateral renal hypodysplasia. One copy of either Hdac1 or Hdac2 is sufficient to sustain normal renal development. In addition to defective cell proliferation and survival, genome-wide transcriptional profiling revealed that the canonical Wnt signaling pathway is specifically impaired in UB^{Hdac1,2−/−} kidneys. Our results also demonstrate that loss of Hdac1 and Hdac2 in the UB epithelium leads to marked hyperacetylation of the tumor suppressor protein p53 on lysine 370, 379 and 383; these post-translational modifications are known to boost p53 stability and transcriptional activity. Genetic deletion of p53 partially rescues the development of UB^{Hdac1,2−/−} kidneys. Together, these data indicate that Hdac1 and Hdac2 are crucial for kidney development. They perform redundant, yet essential, cell lineage-autonomous functions via p53-dependent and -independent pathways.