Affymetrix GeneChip technology was employed to detect differentially expressed genes in inner medullary collecting duct (IMCD3) cells grown under isotonic and hypertonic conditions. A marked up-regulation was found for the zinc-finger protein ZAC1 under hypertonic stress (219-fold, p < 0.001). Changes in expression for ZAC1 were verified by quantitative PCR for message and Western blotting for protein. In mouse and human kidney tissues, ZAC1 expression was substantial in the papilla and was absent in the cortex. Furthermore, ZAC1 expression significantly increased in the papilla of mice following 36 h of fluid restriction and decreased in polyuric mice consuming sucrose in water. Because ZAC1 has been described to be a potential negative regulator of sorbitol dehydrogenase (SDH) in hippocampal cells, we examined whether this relationship also occurs in kidney cells under hypertonic stress. We found that stable IMCD3 clones silenced for ZAC1 to varying levels demonstrated an inverse effect on SDH expression. ZAC1 binds to a consensus repression site within the promoter of SDH, pointing to a mechanism whereby ZAC1 acts by repressing SDH transcriptional activity during hypertonic conditions. Taken together, these data strongly suggest that ZAC1 is up-regulated under hypertonic stress and negatively regulates expression of SDH, allowing for accumulation of sorbitol as a compatible organic osmolyte.