Congenital anomalies of the kidneys and urinary tract (CAKUT) are the most common cause of chronic kidney disease in the first three decades of life. Identification of single-gene mutations that cause CAKUT permits the first insights into related disease mechanisms. However, for most cases the underlying defect remains elusive. We identified a kindred with an autosomal-dominant form of CAKUT with predominant ureteropelvic junction obstruction. By whole exome sequencing, we identified a heterozygous truncating mutation (c.1010delG) of T-Box transcription factor 18 (TBX18) in seven affected members of the large kindred. A screen of additional families with CAKUT identified three families harboring two heterozygous TBX18 mutations (c.1570C>T and c.487A>G). TBX18 is essential for developmental specification of the ureteric mesenchyme and ureteric smooth muscle cells. We found that all three TBX18 altered proteins still dimerized with the wild-type protein but had prolonged protein half life and exhibited reduced transcriptional repression activity compared to wild-type TBX18. The p.Lys163Glu substitution altered an amino acid residue critical for TBX18-DNA interaction, resulting in impaired TBX18-DNA binding. These data indicate that dominant-negative TBX18 mutations cause human CAKUT by interference with TBX18 transcriptional repression, thus implicating ureter smooth muscle cell development in the pathogenesis of human CAKUT.