While hyperosmolality of the kidney medulla is essential for urinary concentration, it imposes a great deal of stress. Cells in the renal medulla adapt to the stress of hypertonicity (hyperosmotic salt) by accumulating organic osmolytes. Tonicity-responsive enhancer (TonE) binding protein (TonEBP) (or NFAT5) stimulates transcription of transporters and a synthetic enzyme for the cellular accumulation of organic osmolytes. We found that dominant-negative TonEBP reduced expression of HSP70 as well as the transporters and enzyme. Near the major histocompatibility complex class III locus, there are three HSP70 genes named HSP70-1, HSP70-2, and HSC70t. While HSP70-1 and HSP70-2 were heat inducible, only HSP70-2 was induced by hypertonicity. In the 5' flanking region of the HSP70-2 gene, there are three sites for TonEBP binding. In cells transfected with a reporter plasmid containing this region, expression of luciferase was markedly stimulated in response to hypertonicity. Coexpression of the dominant-negative TonEBP reduced the luciferase expression. Mutating all three sites in the reporter plasmid led to a complete loss of induction by hypertonicity. Thus, TonEBP rather than heat shock factor stimulates transcription of the HSP70-2 gene in response to hypertonicity. We conclude that TonEBP is a master regulator of the renal medulla for cellular protection against high osmolality via organic osmolytes and molecular chaperones.