Aldosterone selectivity in mineralocorticoid target tissues has been suggested to be due to 11 beta-hydroxysteroid dehydrogenase (11-OHSD), which, by inactivating the endogenous glucocorticoids cortisol and corticosterone (CS), would allow aldosterone to bind to the mineralocorticoid receptor that has equal affinity for aldosterone and natural glucocorticoids. However, a recent immunohistochemical study failed to colocalize 11-OHSD and mineralocorticoid receptors in the kidney. The goal of this study was to determine 1) whether metabolism of CS occurs in the renal target cells of aldosterone, i.e. in cortical collecting duct cells, and 2) if it does so, whether this activity is sufficient to reduce intracellular CS levels to allow binding of aldosterone to the mineralocorticoid receptor. Cortical collecting duct cells were isolated by solid phase immunoadsorption, with a cell purity of approximately 98%. Metabolism of CS was studied in both freshly isolated cells and primary cultures grown as monolayers on permeable supports. Freshly isolated cells rapidly converted CS to 11-dehydro-CS, which was the only major metabolite detected. In intact collecting duct cells 11-OHSD had an apparent Km for CS of approximately 60 nM, a value more than 100-fold lower than the Km of 11-OHSD in the rat liver, and a maximum velocity of approximately 1.7 x 10(-14) mol/min.1000 cells. In cultured cells, when [3H]CS was applied to one side of the monolayer, almost all radioactivity on the opposite side was 11-dehydro-CS. The cells were able to almost completely metabolize CS passing through them for up to a concentration of 2.5 x 10(-7) M. Carbenoxolone, an inhibitor of 11-OHSD, reduced CS degradation by 88%. Neither freshly isolated nor cultured collecting duct cells converted [3H]11-dehydro-CS back to CS in a significant amount (less than 1%). These data provide functional evidence for 11-OHSD activity in renal aldosterone target cells and indicate that this enzyme might be a collecting duct-specific isoform of 11-OHSD which can sufficiently reduce intracellular CS concentrations to contribute to the apparent mineralocorticoid selectivity of the collecting duct.