The multidrug resistance P-glycoprotein (P-gp), which transports hydrophobic drugs out of cells, is also associated with volume-activated chloride currents. It is not yet clear whether P-gp is a channel itself, or whether it is a channel regulator. Activation of chloride currents by hypotonicity in cells expressing P-gp was shown to be regulated by protein kinase C (PKC). HeLa cells exhibited volume-activated chloride currents indistinguishable from those obtained in P-gp-expressing cells except that they were insensitive to PKC. HeLa cells did not express detectable P-gp but, following transient transfection with cDNA encoding P-gp, the volume-activated channels acquired PKC regulation. PKC regulation was abolished when serine/threonine residues in the consensus phosphorylation sites of the linker region of P-gp were replaced with alanine. Replacement of these residues with glutamate, in order to mimic the charge of the phosphorylated protein, also mimicked the effects of PKC on channel activation. These data demonstrate that PKC-mediated phosphorylation of P-gp regulates the activity of an endogenous chloride channel and thus indicate that P-gp is a channel regulator.