The KCl cotransporter (KCC) plays a significant role in the ionic and osmotic homeostasis of many cell types. Four KCC isoforms have been cloned. KCC1 and KCC4 activity is osmolality-sensitive and involved in volume regulation. KCC2, a neuronal-specific isoform, can lower intracellular Cl(-) and is critical for inhibitory GABA responses in the mature central nervous system. KCC3, initially cloned from vascular endothelial cells, is widely but not universally distributed and has an unknown physiological significance. Here we show a tight link between the expression and activity of KCC3 and cell growth by a NIH/3T3 fibroblast expression system. KCC3 activity is sensitive to [(dihydroindenyl)oxy] alkanoic acid (DIOA) and N-ethylmaleimide and is regulated by tyrosine phosphorylation. Osmotic swelling does not activate KCC3, and the process of regulatory volume decrease is refractory to DIOA, indicating that KCC3 is not involved in volume regulation. KCC3 expression enhances cell proliferation, and this growth advantage can be abolished by the inhibition of KCC3 by DIOA. Fluorescence-activated cell sorting measurements and Western blot analysis show DIOA caused a significant reduction of the cell fraction in proliferative phase and a change in phosphorylation of retinoblastoma protein (Rb) and cdc2, suggesting that KCC3 activity is important for cell cycle progression. Insulin-like growth factor-1 up-regulates KCC3 expression and stimulates cell growth. Tumor necrotic factor-alpha down-regulates KCC3 expression and causes growth arrest. These data indicate that KCC3 is an important KCC isoform that may be involved in cell proliferation.