A 4-month-old male Trakehner foal with a history of hematuria, poor growth, and abnormal hair was found to have unilateral hydronephrosis and hydroureter, as determined by ultrasonography and surgical exploration. Nephrectomy and ureterectomy were performed as treatment. Gross examination of the ureter and kidney revealed renal pelvic and ureteral polyps causing obstruction and subsequent hydronephrosis. The histologic features were consistent with renal dysplasia. The polyps and renal dysplasia were likely to be congenital, but the etiopathogenesis is not known. The finding that urinary outflow obstruction can disrupt nephrogenesis and lead to renal dysplasia supports the view that the polyps developed, blocked urine flow, and caused the hydronephrosis and renal dysplasia in the foal.