The kidney develops in a specific position along the anterior-posterior axis. All vertebrate kidney tissues are derived from the intermediate mesoderm (IM), and early kidney genes such as Lim1 and Pax2 are expressed in amniotes posterior to the sixth somite axial level. IM cells anterior to this level do not express kidney genes owing to changes in their competence to respond to kidney-inductive signals present along the entire axis. We aimed to understand the molecular mechanisms governing the loss of competence of anterior IM cells and the formation of the anterior border of the kidney morphogenetic field. We identified the dorsal neural tube as the potential kidney-inductive tissue and showed that activin, a secreted morphogen, is necessary but insufficient for Lim1 induction and establishment of the kidney field. Activin or activin-like and BMP signaling cascades are activated along the entire axis, including in anterior non-kidney IM, suggesting that competence to respond to these signals involves downstream or other components. Detailed expression pattern analysis of Hox genes during early chick development revealed that paralogous group four genes share the same anterior border as the kidney genes. Ectopic expression of Hoxb4 in anterior non-kidney IM, either by retinoic acid (RA) administration or plasmid-mediated overexpression, resulted in ectopic kidney gene expression. The anterior expansion of Lim1 expression was restrained when Hoxb4 was co-expressed with a truncated form of activin receptor. We suggest a model in which the competence of IM cells to respond to TGFbeta signaling and express kidney genes is driven by RA and mediated by Hoxb4.