The outer medullary collecting duct (OMCD) plays an important role in bicarbonate reabsorption and acid-base regulation. An apical V-type H+-ATPase and a basolateral Cl-/HCO3- exchanger, located in intercalated cells of OMCD, mediate the bicarbonate reabsorption. Here we report the identification of a new basolateral Cl-/HCO3- exchanger in OMCD intercalated cells in rat kidney. Northern hybridizations demonstrated the predominant expression of this transporter, also known as SLC26A7, in the outer medulla, with lower expression levels in the inner medulla. SLC26A7 was recognized as a approximately 90-kDa band in the outer medulla by immunoblot analysis and was localized on the basolateral membrane of a subset of OMCD cells by immunocytochemical staining. No labeling was detected in the cortex. Double-immunofluorescence labeling with the aquaporin-2 and SLC26A7 antibodies or anion exchanger-1 and SLC26A7 antibodies identified the SLC26A7-expressing cells as alpha-intercalated cells. Functional studies in oocytes demonstrated that increasing the osmolality of the media (to simulate the physiological milieu in the medulla) increased the Cl-/HCO3- exchanger activity mediated via SLC26A7 by about threefold (P < 0.02 vs. normal condition). We propose that SLC26A7 is a basolateral Cl-/HCO3- exchanger in intercalated cells of the OMCD and may play an important role in bicarbonate reabsorption in medullary collecting duct.