The advent of organoids has renewed researchers’ interest in in vitro cell culture systems. A wide variety of protocols, primarily utilizing pluripotent stem cells, are under development to improve organoid generation to mimic organ development. The complexity of organoids generated is greatly influenced based on the method used. Understanding the process of kidney organoid formation gives developmental insights into how renal cells form, mature, and interact with the adjacent cells to form specific spatiotemporal structural patterns. This knowledge can bridge the gaps in understanding in vivo renal developmental processes. Evaluating genetic and epigenetic signatures in specialized cell types can help interpret the molecular mechanisms governing cell fate. In addition, development in single-cell RNA sequencing, 3D bioprinting and microfluidic technologies has led to better identification and understanding of a variety of cell types during differentiation and designing of complex structures to mimic the conditions in vivo. While several reviews have highlighted the application of kidney organoids, there is no comprehensive review of various methodologies specifically focusing on kidney organoids. This review summarizes the updated differentiation methodologies, applications, and challenges associated with kidney organoids. Here we have comprehensively collated all the different variables influencing the organoid generation.