In response to ambient hypertonicity, TonEBP (tonicity-responsive enhancer binding protein) stimulates certain genes including those encoding cytokines, transporters for organic solutes, and a molecular chaperone. TonEBP is regulated in a bidirectional manner, upregulated by an increase in ambient tonicity while downregulated by a decrease. To investigate the role of intracellular ionic strength in the activity of TonEBP, we subjected Madin-Darby canine kidney cells to a variety of conditions. Electron microprobe analysis was performed to measure intracellular electrolytes. Under conditions in which changes in cell volume were similar, TonEBP activity correlated with the intracellular ionic strength regardless of the external tonicity. On the other hand, inhibition of the Na+/K+-ATPase and high external K+ concentration led to a decreased activity of TonEBP despite a marked increase in the intracellular ionic strength. Because isotonic swelling is known to occur under these conditions, these data suggest that dilution of the cytoplasmic constituents inhibits the activity of TonEBP. We conclude that intracellular ionic strength and water content are major factors that determine the activity of TonEBP.