1. Theophylline (10 mM) and choleragen (1 x 10(-6) g ml.-1) abolish net fluid absorption by everted sacs of rabbit ileum. Triaminopyrimidine (20 mM) and ethacrynate (0.1 mM) prevent this inhibition of net fluid movement. Replacing Ringer Cl- with isethionate prevents the theophylline-dependent decrease in fluid absorption also. 2. Ouabain (0.1 mM) abolishes net fluid movements in both control and theophylline-treated tissue. 3. With ouabain present, hypertonic NaCl (200 mM) in the mucosal solution causes net fluid secretion (serosal-mucosal flux). With theophylline added to both the mucosal and serosal solution, net fluid absorption (mucosal-serosal flux) is observed (P less than 0.001). Triaminopyrimidine (20 mM), or ethacrynate (0.1 mM), or replacement of Ringer Na+ with choline, or Ringer Cl- with isethionate all prevent the theophylline-induced reversal of osmotic flow. 4. Theophylline increases passive net flux of Na+ and Cl- from mucosal solution containing hypertonic (200 mM) NaCl+ ouabain (0.1 mM) across sheets of ileum into serosal solution containing mannitol Ringer + ouabain. The increased passive Na+ flux is blocked by triaminopyrimidine and the increased Na+ and Cl- fluxes are blocked by ethacrynate (0.1 mM). 5. The suggested route of increased NaCl leakage is via the paracellular pathway as it is inhibited by triaminopyrimidine. The increase, itself, is a consequence of the increased passive permeability of the mucosal border to Cl-, induced by theophylline or choleragen. Water is apparently electro-osmotically coupled to the paracellular Na+ leakage (100 mole water mole-1 Na+), hence increased passive leakage reverses osmotic flow. In active tissue the lateral intercellular space contains hypertonic NaCl, and hence increased leakage of NaCl across the tight-junction in theophylline or choleragen-treated tissue gives rise to net fluid secretion.