The epidermal growth factor receptor (EGFR) has frequently been implicated in hyperproliferative diseases of renal tubule epithelia. We have shown that the NF2 tumor suppressor Merlin inhibits EGFR internalization and signaling in a cell contact–dependent manner. Interestingly, despite the paucity of recurring mutations in human renal cell carcinoma (RCC), homozygous mutation of the NF2 gene is found in ≈2% of RCC patient samples in the Sanger COSMIC database. To examine the roles of Merlin and EGFR in kidney tumorigenesis, we generated mice with a targeted deletion of Nf2 in the proximal convoluted epithelium using a Villin-Cre transgene. All of these mice developed intratubular neoplasia by 3 months, which progressed to invasive carcinoma by 6–10 months. Kidneys from these mice demonstrated marked hyperproliferation and a concomitant increase in label-retaining putative progenitor cells. Early lumen-filling lesions in this model exhibited hyperactivation of EGFR signaling, altered solubility of adherens junctions components, and loss of epithelial polarity. Renal cortical epithelial cells derived from either early or late lesions were dependent on EGF for in vitro proliferation and were arrested by pharmacologic inhibition of EGFR or re-expression of Nf2. These cells formed malignant tumors upon s.c. injection into immunocompromised mice before in vitro passage. Treatment of Vil-Cre;Nf2^lox/lox mice with the EGFR inhibitor erlotinib halted the proliferation of tumor cells. These studies give added credence to the role of EGFR signaling and perhaps Nf2 deficiency in RCC and describe a rare and valuable mouse model for exploring the molecular basis of this disease.