Nephrons, the functional units of the kidney, develop from progenitor cells (cap mesenchyme [CM]) surrounding the epithelial ureteric bud (UB) tips. Reciprocal signaling between UB and CM induces nephrogenesis and UB branching. Although low nephron number is implicated in hypertension and renal disease, the mechanisms that determine nephron number are obscure. To test the importance of nephron progenitor cell number, we genetically ablated 40% of these cells, asking whether this would limit kidney size and nephron number or whether compensatory mechanisms would allow the developing organ to recover. The reduction in CM cell number decreased the rate of branching, which in turn allowed the number of CM cells per UB tip to normalize, revealing a self-correction mechanism. However, the retarded UB branching impaired kidney growth, leaving a permanent nephron deficit. Thus, the number of fetal nephron progenitor cells is an important determinant of nephron endowment, largely via its effect on UB branching.