Cell survival in the hypertonic environment of the renal medulla is dependent on the intracellular accumulation of protective organic solutes through the induction of genes whose transcriptional regulation is mediated in part by interaction between osmotic response elements and the transcription nuclear factor of activated T lymphocyte 5. It is shown that cyclosporine A (CsA) prevents the nuclear translocation of the transcription nuclear factor of activated T lymphocyte 5 and inhibits osmotic response element-mediated reporter gene expression. The expression of mRNA for hypertonicity-induced genes (aldose reductase, betaine/gamma-amino-n-butyric acid transporter 1, and heat shock protein 70) is also decreased in the medulla of CsA-treated rats. CsA inhibits the increase of betaine/gamma-amino-n-butyric acid transporter 1 and heat shock protein 70 mRNA in osmotically stressed MDCK cells, blocks cell proliferation under isotonic conditions, and augments hypertonicity-induced apoptosis. Histologic examination of the kidneys of CsA-treated rats shows a marked increase in apoptosis in the renal medulla where hypertonicity normally prevails. The data are consistent with calcineurin-mediated induction of hypertonic stress-response genes, and they suggest that CsA nephrotoxicity may in part result from inhibition of the adaptive responses to hypertonicity occurring during the urinary concentrating mechanism.