Tubulointerstitial fibrosis is the final common pathway to end-stage renal failure. The present study investigated the potential role of tubular epithelial cells (TEC) in progressive fibrosis in the rat remnant kidney model. Rats underwent 5/6 nephrectomy or a sham operation (control), and groups of six animals were killed at weeks 1, 3, 5, 9, 13, 17 and 21. Immunohistochemistry staining and in situ hybridization at week 3 after nephrectomy demonstrated de novo expression of alpha-smooth muscle actin (alpha-SMA)--a marker of smooth muscle cells and myofibroblasts--by TEC that was invariably associated with disruption of the tubular basement membrane (TBM). This phenotypic evidence of tubular epithelial-myofibroblast transdifferentiation was supported by ultrastructural studies identifying the presence of characteristic actin microfilaments and dense bodies within TEC with a transformed morphology. In the late stage of this apparent tubular epithelial-myofibroblast transdifferentiation, TEC lost apical-basal polarity and tight junctions, became elongated, detached from the TBM, separated from neighboring cells and appeared to migrate into the peritubular interstitium through the damaged basement membrane. Indeed, focal peritubular accumulation of alpha-SMA+ myofibroblasts and local tubulointerstitial fibrosis was closely associated with alpha-SMA+ tubules, suggesting a tubular epithelial origin for some of these cells. Quantitative analysis found a significant correlation between the number of alpha-SMA+ TEC and the accumulation of interstitial alpha-SMA+ myofibroblasts and the severity of tubulointerstitial fibrosis (both P < 0.001). This study provides phenotypic and morphological evidence to support the hypothesis that TEC are pro-fibrogenitor cells capable of tubular epithelial-myofibroblast transdifferentiation in progressive renal fibrosis. In addition, we postulate that disruption of the TBM, which facilitates epithelial cell contact with the interstitial matrix, promotes this process of transdifferentiation.