A mutation in the human FXYD2 polypeptide (Na-K-ATPase gamma subunit) that changes a conserved transmembrane glycine to arginine is linked to dominant renal hypomagnesemia. Xenopus laevis oocytes injected with wild-type FXYD2 or the mutant G41R cRNAs expressed large nonselective ion currents. However, in contrast to the wild-type FXYD2 currents, inward rectifying cation currents were induced by hyperpolarization pulses in oocytes expressing the G41R mutant. Injection of EDTA into the oocyte removed inward rectification in the oocytes expressing the mutant, but did not alter the nonlinear current-voltage relationship of the wild-type FXYD2 pseudo-steady-state currents. Extracellular divalent ions, Ca2+ and Ba2+, and trivalent cations, La3+, blocked both the wild-type and mutant FXYD2 currents. Site-directed mutagenesis of G41 demonstrated that a positive charge at this site is required for the inward rectification. When the wild-type FXYD2 was expressed in Madin-Darby canine kidney cells, the cells in the presence of a large apical-to-basolateral Mg2+ gradient and at negative potentials had an increase in transepithelial current compared with cells expressing the G41R mutant or control transfected cells. Moreover, this current was inhibited by extracellular Ba2+ at the basolateral surface. These results suggest that FXYD2 can mediate basolateral extrusion of magnesium from cultured renal epithelial cells and provide new insights into the understanding of the possible physiological roles of FXYD2 wild-type and mutant proteins.