Slc26a2 is a ubiquitously expressed SO(4)(2-) transporter with high expression levels in cartilage and several epithelia. Mutations in SLC26A2 are associated with diastrophic dysplasia. The mechanism by which Slc26a2 transports SO(4)(2-) and the ion gradients that mediate SO(4)(2-) uptake are poorly understood. We report here that Slc26a2 functions as an SO(4)(2-)/2OH(-), SO(4)(2-)/2Cl(-), and SO(4)(2-)/OH(-)/Cl(-) exchanger, depending on the Cl(-) and OH(-) gradients. At inward Cl(-) and outward pH gradients (high Cl(-)(o) and low pH(o)) Slc26a2 functions primarily as an SO(4)(2-)(o)/2OH(-)(i) exchanger. At low Cl(-)(o) and high pH(o) Slc26a2 functions increasingly as an SO(4)(2-)(o)/2Cl(-)(i) exchanger. The reverse is observed for SO(4)(2-)(i)/2OH(-)(o) and SO(4)(2-)(i)/2Cl(-)(o) exchange. Slc26a2 also exchanges Cl(-) for I(-), Br(-), and NO(3)(-) and Cl(-)(o) competes with SO(4)(2-) on the transport site. Interestingly, Slc26a2 is regulated by an extracellular anion site, required to activate SO(4)(2-)(i)/2OH(-)(o) exchange. Slc26a2 can transport oxalate in exchange for OH(-) and/or Cl(-) with properties similar to SO(4)(2-) transport. Modeling of the Slc26a2 transmembrane domain (TMD) structure identified a conserved extracellular sequence (367)GFXXP(371) between TMD7 and TMD8 close to the conserved Glu(417) in the permeation pathway. Mutation of Glu(417) eliminated transport by Slc26a2, whereas mutation of Phe(368) increased the affinity for SO(4)(2-)(o) 8-fold while reducing the affinity for Cl(-)(o) 2 fold, but without affecting regulation by Cl(-)(o). These findings clarify the mechanism of net SO(4)(2-) transport and describe a novel regulation of Slc26a2 by an extracellular anion binding site and should help in further understanding aberrant SLC26A2 function in diastrophic dysplasia.