During antidiuresis, the rat kidney maintains a variable and steep osmotic gradient from the cortex (300 mOsm) to the inner medulla (at least 2,600 mOsm). Therefore, cells in the renal medulla must be able to adapt to a variably hyperosmotic environment. We have examined the ability of tissue fragments taken from various points on the cortical-medullary axis to survive and grow when cultured in media made hyperosmotic with urea and NaCl. Survival and growth were measured by the explants' ability to produce epithelial outgrowths. At osmotic concentrations of 1,100 and 1,200 mOsm, only explants from the inner medulla produced epithelial outgrowths. At 700 mOsm, all explants produced outgrowths but outgrowth size was a function of position on the cortical-medullary axis, with inner medullary fragments producing the largest outgrowths. Growth was most rapid at all osmolalities when the Na+:urea ratio was 1:1. These results are consistent with the hypothesis that renal medullary cells are adapted to elevated concentrations of Na+ and urea. Both explants and epithelial outgrowths were examined using light and electron microscopy. Physical continuities between the epithelial outgrowths and collecting duct epithelium in the explants, as well as the ultrastructural characteristics of the outgrowths at 700 mOsm, indicated that the outgrowths may have originated from collecting duct epithelium.