It is now becoming apparent that the medullary circulation in the kidney can be regulated separately from overall renal blood flow. This characteristic of the medullary circulation plays an important role in the kidney's ability to excrete a dilute or concentrated urine in concert with changes in water and sodium transport in the distal nephron secondary to the action of vasopressin, prostaglandins, the renal nerves, and other hormones without significant other renal hemodynamic changes. There is strong evidence that renal autocoids such as angiotensin II and prostaglandins uniquely affect regional blood flow in the inner medulla because of the special structure and organization of the microvasculature in this region. There is also evidence that this regional blood flow is in part regulated by circulating hormones, such as vasopressin and atrial natriuretic peptide, which are released in response to changes in extracellular fluid volume or osmolality. In addition, data are emerging to suggest that the kallikrein-kinin system, acetylcholine, the renal nerves and adenosine participate in this regulation. In addition to the role of the medullary circulation in the urinary concentrating operation, there are data to suggest that the medullary circulation either directly (by changes in physical forces) or indirectly (by regulating medullary toxicity) may influence sodium excretion in a variety of conditions. In this regard, activation of the renin-angiotensin system locally reduces blood flow in the papilla which may be necessary before sodium retention is fully expressed in salt retaining states. Future research looking at the microvasculature of the medulla and papilla and those factors that control the contractility of these vessels are necessary before a clearer picture emerges. Nevertheless, from the data already available it seems reasonable to suggest that the medullary circulation may be as important to kidney function during physiological and pathophysiological states as is the cortical circulation.