Tonicity-responsive binding-protein (TonEBP or NFAT5) is a widely expressed transcription factor whose activity is regulated by extracellular tonicity. TonEBP plays a key role in osmoprotection by binding to osmotic response element/TonE elements of genes that counteract the deleterious effects of cell shrinkage. Here, we show that in addition to this "classical" stimulation, TonEBP protects cells against hypertonicity by enhancing nuclear factor-kappaB (NF-kappaB) activity. We show that hypertonicity enhances NF-kappaB stimulation by lipopolysaccharide but not tumor necrosis factor-alpha, and we demonstrate overlapping protein kinase B (Akt)-dependent signal transduction pathways elicited by hypertonicity and transforming growth factor-alpha. Activation of p38 kinase by hypertonicity and downstream activation of Akt play key roles in TonEBP activity, IkappaBalpha degradation, and p65 nuclear translocation. TonEBP affects neither of these latter events and is itself insensitive to NF-kappaB signaling. Rather, we reveal a tonicity-dependent interaction between TonEBP and p65 and show that NF-kappaB activity is considerably enhanced after binding of NF-kappaB-TonEBP complexes to kappaB elements of NF-kappaB-responsive genes. We demonstrate the key roles of TonEBP and Akt in renal collecting duct epithelial cells and in macrophages. These findings reveal a novel role for TonEBP and Akt in NF-kappaB activation on the onset of hypertonic challenge.