The development addresses the two main problems in kidney transplantation: the dire shortage of the organs, and rejection and the use of powerful anti-rejection drugs.
The kidneys grew from embryonic cells no bigger than a pinhead and tests have revealed that the final organs functioned normally, although they only reached one-third of adult size.
The scientists also demonstrated that it was possible to take embryonic kidney cells from one species - laboratory mice - and grow them into fully developed organs in the bodies of a second species - rats.
Medical researchers believe this shows it is feasible to grow kidneys in humans from embryo kidney cells derived from pigs. The result would be chimeric organs - a mixture of human and pig cells - which would be less prone to rejection than fully developed organs transplanted from adult pigs.
An alternative approach would be to transplant cells from human embryos to grow complete human kidneys in a patient, although this would raise ethical objections from some anti-abortion groups.
"The organs look just like normal rat kidneys," according to Dr Marc Hammerman, who carried out the study at Washington University in St Louis.
Tiny dots of kidney tissue from embryos were placed in the space between the skin and the abdominal organs. New blood vessels grew around the organs and within six weeks they had reached one-third of adult size.
"This is the first time anyone has done this. It should not in principle be possible, which is probably why people haven't tried it in this precise way," Dr Hammerman said.
Dr Hammerman said that as yet the new kidneys have only worked at about 1 per cent of normal function, but he believes this could easily be improved to 10 per cent, which is the point at which patients are put on dialysis machines.
Dr Adrian Woolf, head of the kidney unit at the Institute of Child Health in London, said the technique would make it technically possible genetically to engineer the new kidneys to function better at, for instance, producing the hormones that kidney patients lack.
"Another potential advantage is that foetal tissue itself may be less liable to induce an immune reaction, making them less likely to be rejected," Dr Woolf said. "It's a nice idea but one problem is getting the kidneys to grow to their full capacity." He said he did not believe the problems were insurmountable, however.
Dr Hammerman said it was not possible to predict exactly when the first foetal kidneys would be grown in humans, but he estimated five to ten years.
The shortage of kidneys for transplants is getting worse each year, according to the UK Transplant Authority. Last year, there were 1,635 kidney transplants and 5,600 people on the waiting list at the end of last December.Reuse content