Kidney cells, especially the epithelial cells lining the collecting tubules in the inner medulla, are constantly exposed to concentrated urine. They are protected from the osmotic effect of high levels of sodium ion and urea by accumulating compatible osmolytes such as sorbitol, betaine, and myo-inositol. These osmolytes are involved in maintaining cell volume and electrolyte contents because they do not perturb the protein structure and function over a wide range of concentrations. Sorbitol is produced via the reduction of glucose by aldose reductase (AR), while betaine and myo-inositol are transported into the cells through specific transporters. Under hyperosmotic stress, transcriptions of genes encoding these proteins are highly induced. The induction of transcription was found to be mediated through the osmotic response elements (OREs) located in the 5' flanking sequences of these genes. We had earlier identified the OREs in human AR gene. In this study we purified and identified the osmotic response element binding protein (OREBP). OREBP is a transcription factor of approximately 200 kDa in size, characterized by a Rel-like DNA binding domain and a glutamine-rich transactivation domain. Dominant negative OREBP significantly diminished hyperosmotic AR gene induction. Immunohistochemical analysis showed that this transcription factor is rapidly translocated into the nucleus upon hyperosmotic stress.