We determined the relationship between the activation state and phosphorylation state of the Na-K-Cl cotransport protein in tubules isolated from the shark rectal gland, a prototypic chloride-secreting epithelium. In response to cAMP-dependent secretagogues (e.g. vasoactive intestinal peptide, adenosine, and forskolin) or osmotically induced changes in cell volume, the activation state of the cotransport protein (assessed from measurements of loop diuretic binding) increased 5-10 fold. The response was temporally associated with a comparable increase (3-9 fold) in cotransport protein phosphorylation. Graded changes in cotransporter activation evoked proportional changes in cotransporter phosphorylation. Under the conditions of our experiments, the 195-kDa cotransporter was the only membrane protein whose phosphorylation state increased conspicuously in response to both cAMP and cell shrinkage. Both stimuli promoted phosphorylation of the cotransport protein at serine and threonine residues. One of the cAMP-sensitive phosphoacceptors was found within a segment of the cotransport protein comprised of a sequence (Phe-Gly-His-Asn-Thr*-Ile-Asp-Ala-Val-Pro) that corresponds to a segment of the Na-K-Cl cotransport protein predicted by cDNA analysis, where the phosphoacceptor (Thr*) is threonine 189. Incubation of rectal gland tubules with K-252a or H-8, structurally different protein kinase inhibitors, rendered the cotransporter insensitive to both cAMP and cell shrinkage. We conclude that the rectal gland Na-K-Cl cotransport protein is regulated by direct reversible phosphorylation at serine and threonine sites.