The molecular mechanism of cyst formation and expansion in autosomal recessive polycystic kidney disease (ARPKD) is poorly understood, but impaired mechanosensitivity to tubular flow and dysfunctional calcium signaling are important contributors. The activity of the mechanosensitive Ca(2+)-permeable TRPV4 channel underlies flow-dependent Ca(2+) signaling in murine collecting duct (CD) cells, suggesting that this channel may contribute to cystogenesis in ARPKD. Here, we developed a method to isolate CD-derived cysts and studied TRPV4 function in these cysts laid open as monolayers and in nondilated split-open CDs in a rat model of ARPKD. In freshly isolated CD-derived cyst monolayers, we observed markedly impaired TRPV4 activity, abnormal subcellular localization of the channel, disrupted TRPV4 glycosylation, decreased basal [Ca(2+)]i, and loss of flow-mediated [Ca(2+)]i signaling. In contrast, nondilated CDs of these rats exhibited functional TRPV4 with largely preserved mechanosensitive properties. Long-term systemic augmentation of TRPV4 activity with a selective TRPV4 activator significantly attenuated the renal manifestations of ARPKD in a time-dependent manner. At the cellular level, selective activation of TRPV4 restored mechanosensitive Ca(2+) signaling as well as the function and subcellular distribution of TRPV4. In conclusion, the functional status of TRPV4, which underlies mechanosensitive Ca(2+) signaling in CD cells, inversely correlates with renal cystogenesis in ARPKD. Augmenting TRPV4 activity may have therapeutic potential in ARPKD.