A new classification and terminology is proposed for precursor lesions of Wilms' tumor (WT), based upon morphology and natural history. The generic term nephrogenic rest (NR) is used for all WT precursors. Two major categories of NR are recognized: perilobar (PLNR) and intralobar (ILNR). Nephroblastomatosis signifies the presence of multiple or diffuse NRs. Nephroblastomatosis can be classified into four categories: (a) perilobar (PLNR only); (b) intralobar (ILNR only); (c) combined (PLNR and ILNR); and (d) universal. The individual rests can be subdivided into (a) nascent or dormant NRs; (b) maturing or sclerosing NRs; (c) hyperplastic NRs; and (d) neoplastic NRs. Of 282 evaluable unilateral WT specimens, 28.4% were definitely rest-positive, and an additional 12.4% were probably positive, with equal prevalence of PLNRs and ILNRs. Median age at diagnosis of WT was 36 months with PLNRs, 16 months with ILNRs, and 12 months if both types were present. PLNRs were strongly associated with synchronous bilateral WTs, and ILNRs with melachronous contralateral WTs. ILNRs were associated with aniridia and Drash syndrome, whereas PLNRs were more commonly found with hemihypertrophy and/or Beckwith-Wiedemann syndrome. The delineation of two distinct categories of WT precursors suggests pathogenetic heterogeneity for WTs. The biological and clinical implications of NRs are considered in the context of this classification.