Background: Hereditary Wilms tumors are preceded by WT1(Ϫ) clones with an inhibitory chromatin histone pattern established by EZH2. Results: In amniotic mesenchymal stem cells, WT1 suppresses EZH2, derepresses -catenin (CTNNB1), and enhances responsiveness to WNT9b. Conclusion: WT1 regulates transition from the epigenetically silenced chromatin state. Significance: Developmental blockade in nephrogenic rests may be mediated by loss of the WT1-EZH2-CTNNB1 axis.