The prototype proves that a "bio-kidney" can work, emulating breakthroughs elsewhere to build replacement structures for livers, hearts and lungs, they said.
Described in the journal Nature Medicine, the work entailed taking a rat kidney and stripping out its living cells using a detergent solution, leaving behind a shell made of collagen.
The next step was to repopulate this empty structure with living cells, comprising human endothelial cells, which line the walls of blood vessels in the kidney, and kidney cells taken from newborn rats.
The trick was then to "seed" these cells in the correct part of the kidney, using a muscle duct called the ureter as a tube.
The team transplanted the organ into living rats from which a kidney had been removed.
The new kidney started filtering blood and producing urine through the ureter as soon as the bloody supply was restored, and there was no evidence of bleeding or clots.
Further work is needed to fine-tune the cell types to improve organ function, and many hurdles must be overcome before any tests on humans can go ahead, the scientists cautioned.
The researchers stripped cells from pig and human kidneys to test the first phase of the procedure on these organs, but have not taken this further for now.
Harald Ott of the Massachusetts General Hospital Center for Regenerative Medicine said the goal was to help the millions of people with kidney failure whose lives are crimped by dialysis.
"If this technology can be scaled to human-sized grafts, patients suffering from renal failure who are currently waiting for donor kidneys or who are not transplant candidates could theoretically receive new organs derived from their own cells" to prevent rejection by the immune system, he said.