Aquaporin-11 (AQP11) has been identified with unusual pore-forming NPA (asparagine-proline-alanine) boxes, but its function is unknown. We investigated its potential contribution to the kidney. Immunohistochemistry revealed that AQP11 was localized intracellularly in the proximal tubule. When AQP11 was transfected in CHO-K1 cells, it was localized in intracellular organelles. AQP11-null mice were generated; these mice exhibited vacuolization and cyst formation of the proximal tubule. AQP11-null mice were born normally but died before weaning due to advanced renal failure with polycystic kidneys, in which cysts occupied the whole cortex. Remarkably, cyst epithelia contained vacuoles. These vacuoles were present in the proximal tubules of newborn mice. In 3-week-old mice, these tubules contained multiple cysts. Primary cultured cells of the proximal tubule revealed an endosomal acidification defect in AQP11-null mice. These data demonstrate that AQP11 is essential for the proximal tubular function. AQP11-null mice are a novel model for polycystic kidney diseases and will provide a new mechanism for cystogenesis.