Sodium balance, and ultimately blood pressure and extracellular fluid volume, is maintained by precise regulation of the activity of the epithelial sodium channel (ENaC). In a Xenopus kidney epithelial cell line (A6), exposure of the apical membrane to the protease inhibitor aprotinin reduces transepithelial sodium transport. Sodium-channel activity can be restored by subsequent exposure to the nonspecific protease trypsin. Using A6 cells and a functional complementation assay to detect increases in ENaC activity, we have cloned a 329-residue protein belonging to the serine protease family. We show that coexpression of this protein with ENaC in Xenopus oocytes increases the activity of the sodium channel by two- to threefold. This channel-activating protease (CAP1) is expressed in kidney, gut, lung, skin and ovary. Sequence analysis predicts that CAP1 is a secreted and/or glycosylphosphatidylinositol-anchored protein: ENaC activity would thus be regulated by the activity of a protease expressed at the surface of the same cell. This previously undiscovered mechanism for autocrine regulation may apply to other ion channels, in particular to members of the ENaC family that are present in neurons and epithelial cells.