By analyzing the frequency of TSHZ3 variants and their associated phenotype spectrum in a cohort of 301 CAKUT families, determining TSHZ3 expression in human fetal and adult tissues as well as the Tshz3 expression pattern during murine development, and assessing the functional consequences of mutant TSHZ3 harboring N-terminal variants, we provide evidence that rare TSHZ3 missense variants may impact SM cell differentiation via altered SOX9 and MYOCD binding, leading to CAKUT, in particular MCDK, hydronephrosis and hydroureter, as well as specific extrarenal features in humans. The gene discussed is TSHZ3; the disease is hydronephrosis.