The shortage of transplantable organs provides an impetus to develop tissue-engineered alternatives. Producing tissues similar to immature kidneys from simple suspensions of fully dissociated embryonic renal cells is possible in vitro, but glomeruli do not form in the avascular environment. Here, we constructed renal organoids from single-cell suspensions derived from E11.5 kidneys and then implanted these organoids below the kidney capsule of a living rat host. This implantation resulted in further maturation of kidney tissue, formation of vascularized glomeruli with fully differentiated capillary walls, including the slit diaphragm, and appearance of erythropoietin-producing cells. The implanted tissue exhibited physiologic functions, including tubular reabsorption of macromolecules, that gained access to the tubular lumen on glomerular filtration. The ability to generate vascularized nephrons from single-cell suspensions marks a significant step to the long-term goal of replacing renal function by a tissue-engineered kidney.