We here review the functional properties of the paracellular pathway of leaky epithelia such as gallbladder and renal proximal tubule. These epithelia are characterized by leaky terminal bars between adjacent cells which allow small ions, non-electrolytes and water to leak from lumen to interstitial fluid or back. In the past 10 years a great deal of information has been obtained about the properties of the misnamed 'tight' junctions in the terminal bars, by assuming that the overall permeation pattern reflected predominantly the junctional permeation properties. Although recent trans- and intraepithelial impedance analyses indicate that this assumption is not always justified (the contribution of the lateral intercellular space to the paracellular shunt resistance is not negligible, when the spaces are collapsed) it seems that the major conclusions are correct. The properties of the terminal junctions may thus be summarized as follows. (1) Large molecules such as horseradish peroxidase are not able to pass. (2) Passage of lipophilic substances is insignificant, as these substances permeate by the cellular route. (3) Depending on the tissue, ion permeation is either governed by channels with negative fixed charges, or positive fixed charges, or both. As inferred from ion selectivity patterns the channels of different epithelia are either wide and highly hydrated or narrow and poorly hydrated, thus allowing more or less water molecules to pass besides the ions. In narrow channels single-file diffusion may occur. (4) Besides the selective channels a free solution shunt seems to be present in some epithelia. (5) When applied in millimolar concentrations 2,4,6-triaminopyrimidinium and amiloride block negatively charged junctional channels. However these substances do not simply turn leaky epithelia into tight epithelia, because they have additional effects on the cell membranes. (6) As observed in cell cultures, formation of tight junctions requires connecting particles to be present on the cell surface--which seems to be controlled by the cytoskeleton-- and requires the presence of calcium ions as ligands. (7) Cellular control over paracellular permeability may be exerted through changes of intracellular calcium concentration.