Phospholemman (PLM) is a 72-amino-acid peptide with a single transmembrane domain, the expression of which induces chloride currents in Xenopus oocytes. It has remained unknown whether PLM is an ion channel or acts as a channel regulator. Here we show, by measuring unitary anion currents across planar phospholipid bilayers to which immunoaffinity-purified recombinant PLM was added, that it does indeed form ion channels. Excised patches of oocytes expressing PLM had similar currents. Of the ions tested, the sulphonic amino acid taurine was the most permeant, and expression of PLM increased fluxes of radiolabelled taurine in oocytes. Phospholemman is the smallest protein in cell membranes known to form an ion channel and the taurine selectivity suggests that it is involved in cell volume regulation.