The transcriptional activator TonEBP is a central regulator of osmolality in the renal medulla and whole body water homeostasis. In order to understand the regulation of TonEBP in the renal medulla, we examined MDCK cells, a kidney-derived epithelial cell line, under conditions mimicking the renal medulla. Moderate changes in ambient tonicity, which was tolerated without prior adaptation, displayed lasting effects on TonEBP in bidirectional manner-stimulated by hypertonicity and inhibited by hypotonicity. TonEBP expression was further enhanced by extreme hypertonicity observed in the inner medullae of antidiuretic animals. Urea stimulated TonEBP expression and promoted cellular proliferation under the conditions of extreme hypertonicity. On the other hand, the TonEBP activity was negatively modulated under these conditions presumably to temper the highly abundant TonEBP. We conclude that urea is critical to the cellular adaptation to extreme hypertonicity and the high level of TonEBP expression in the inner medulla.