The yeast Saccharomyces cerevisiae (baker's yeast or budding yeast) is an excellent eukaryotic model system for cellular biology with a well-explored, completely sequenced genome. Yeast cells possess robust systems for osmotic adaptation. Central to the response to high osmolarity is the HOG pathway, one of the best-explored MAP kinase pathways. This pathway controls via different transcription factors the expression of more than 150 genes. In addition, osmotic responses are also controlled by protein kinase A via a general stress response pathway and by presently unknown signaling systems. The HOG pathway partially controls expression of genes encoding enzymes in glycerol production. Glycerol is the main yeast osmolyte, and its production is essential for growth in a high osmolarity medium. Upon hypo-osmotic shock, yeast cells transiently stimulate another MAP kinase pathway, the so-called PKC pathway, which appears to orchestrate the assembly of the cell surface and the cell wall. In addition, yeast cells show signs of a regulated volume decrease by rapidly exporting glycerol through Fps1p. This unusual MIP channel is gated by osmotic changes and thereby plays a key role in controlling the intracellular osmolyte content. Yeast cells also possess two aquaporins, Aqy1p and Aqy2p. The production of both proteins is strictly regulated, suggesting that these water channels play very specific roles in yeast physiology. Aqy1p appears to be developmentally regulated. Given the strong yeast research community and the excellent tools of genetics and functional genomics available, we expect yeast to be the best-explored cellular organism for several years ahead, and osmotic responses are a focus of interest for numerous yeast researchers.