We characterized the functional and molecular properties of a volume-regulated anion channel (VRAC) in SV40-immortalized rabbit corneal epithelial cells (tRCE), since they mediate a robust regulatory volume decrease (RVD) response during exposure to a hypotonic challenge. Whole-cell patch clamp-monitored chloride currents and light-scattering measurements evaluated temporal cell-volume responsiveness to hypoosmotic challenges. Exposure to 200 mOsm medium elicited an outwardly-rectifying current (VACC), which was reversible upon reperfusion with isotonic (300 mOsm) medium. VACC and RVD were chloride-dependent because either chloride removal or application of NPPB (100 microM) suppressed these responses. VACC behavior exhibited voltage-dependent inhibition in the presence of DIDS (500 microM), whereas inhibition by both NPPB (100 microM) and niflumic acid (500 microM) was voltage-independent. VACC was insensitive to glibenclamide (250 microM), verapamil (500 microM) or removal of extracellular calcium. Phorbol dibutyrate, PDBu, (100 nM) had no effect on activated VACC. However, preincubation with PDBu prior to hypotonic challenge prevented VACC and RVD responses as well as prolonged characteristic time. An inactive phorbol ester analogue had no effect on RVD behavior. Moreover, Northern blot analysis verified expression of ClC-3 gene transcripts. The presence of ClC-3 transcripts along with the correspondence between the effects of known ClC-3 inhibitors on VACC and RVD suggest that ClC-3 activation underlies these responses to hypotonic-induced cell swelling.