The kidney has a tremendous capacity to regenerate following injury, but factors that govern this response are still largely unknown. We isolated cells from mouse kidneys with high proliferative and multi-lineage differentiation capacity. These cells expressed a high level of Sox9. In regenerating kidneys, Sox9 expression was induced early, and 89% of proliferating cells were Sox9 positive. In vitro, Sox9-positive cells showed unlimited proliferation and multi-lineage differentiation capacity. Using an inducible Sox9 Cre line and lineage-tagging methods, we show that Sox9-positive cells can generate new daughter cells, contributing to the regeneration of proximal tubule, loop of Henle, and distal tubule segments but not to collecting duct and glomerular cells. Furthermore, inducible deletion of Sox9 resulted in reduced epithelial proliferation, more severe injury, and fibrosis development. In summary, we demonstrate that, in the kidney, Sox9-positive cells show progenitor-like properties in vitro and contribute to epithelial regeneration following injury in vivo.