Nephrons are the cells of kidney which are considered as smallest functional unit because it is microscopic structure which actively participates in functions of kidney like blood filtration and osmoregulation. A healthy adult has 0.8 to 1.5 million nephrons in each kidney. It is composed of a renal corpuscle and a renal tubule. The renal corpuscle filters the blood components. The filtrate is transferred to renal tubule for process of tubular secretion and tubular reabsorption which further forms the urine by maintaining its concentration. So the correct answer is “nephron”.