When the renal medulla becomes hypertonic in association with the formation of concentrated urine, the cells of the medulla avoid the stress of high intracellular salts by accumulating small non-perturbing organic osmolytes. The response has been studied in most detail in cultured kidney-derived cells, and confirmed in studies of the intact kidney. The non-perturbing osmolytes, myo-inositol, betaine, and sorbitol, are accumulated because of stimulation of the transcription of the genes for the proteins that catalyze their accumulation by transport or synthesis. The genes involved have all been cloned and sequenced and contain tonicity responsive regulatory elements (TonEs) in their 5′ region. During hypertonicity, the elements are occupied by TonE-binding protein, a transacting factor that has been cloned and characterized. Current efforts focus on identifying the mechanism by which cells sense hypertonicity and how that leads to activation of TonE-binding protein.