Recessive inheritance of mutations in ceroid neuronal lipofuscinosis type 3 (CLN3) results in juvenile neuronal ceroid lipofuscinosis (JNCL), a childhood neurodegenerative disease with symptoms including loss of vision, seizures, and motor and mental decline. CLN3p is a transmembrane protein with undefined function. Using a Cln3 reporter mouse harboring a nuclear-localized bacterial beta-galactosidase (beta-Gal) gene driven by the native Cln3 promoter, we detected beta-Gal most prominently in epithelial cells of skin, colon, lung, and kidney. In the kidney, beta-Gal-positive nuclei were predominant in medullary collecting duct principal cells, with increased expression along the medullary osmotic gradient. Quantification of Cln3 transcript levels from kidneys of wild-type (Cln3(+/+)) mice corroborated this expression gradient. Reporter mouse-derived renal epithelial cultures demonstrated a tonicity-dependent increase in beta-Gal expression. RT-quantitative PCR determination of Cln3 transcript levels further supported osmoregulation at the Cln3 locus. In vivo, osmoresponsiveness of Cln3 was demonstrated by reduction of medullary Cln3 transcript abundance after furosemide administration. Primary cultures of epithelial cells of the inner medulla from Cln3(lacZ/lacZ) (CLN3p-null) mice showed no defect in osmolyte accumulation or taurine flux, arguing against a requirement for CLN3p in osmolyte import or synthesis. CLN3p-deficient mice with free access to water showed a mild urine-concentrating defect but, upon water deprivation, were able to concentrate their urine normally. Unexpectedly, we found that CLN3p-deficient mice were hyperkalemic and had a low fractional excretion of K(+). Together, these findings suggest an osmoregulated role for CLN3p in renal control of water and K(+) balance.