The renal effects of a new, substituted indanyloxyacetic acid diuretic agent were evaluated in 16 anesthetized rats using micropuncture and clearance techniques. Glomerular filtration rate, mean arterial pressure and hematocrit remained unchanged. Urine flow increased 13 times after i.v. administration of 50 mg/kg b.wt. of the diuretic. Sodium excretion increased from 0.4 +/- 0.05% of the amount filtered to 6.62+/-0.87%. Potassium urine/plasma concentration ratio declined 6-fold while potassium excretion nearly doubled. Proximal tubular reabsorption was not altered significantly by this indanone diuretic. Reabsorption was markedly inhibited between late proximal and early distal micropuncture sites, that is, in the loop of Henle. The diuretic did not appear to interfere with normal distal tubular function. In the collecting tubules, reabsorption was markedly reduced from 41+/-0.2 mul/min/100 g b.wt. to 26+/-5 (with P less than .005). This new indanone compound appears to be a potent, specific natriuretic diuretic agent which inhibits tubular reabsorption primarily in the loop of Henle and collecting tubules, that is, in distal nephron segments located deep within the kidney. It produces a somewhat delayed but prolonged diuresis in the rat.