1. Changes in myocardial cell volume and whole-cell currents were measured simultaneously during hyposmotically induced cell swelling. In the conventional patch clamp configuration, hyposmotic challenge caused myocytes to swell continuously and was associated with the development of a sustained, swelling-induced chloride conductance (I-Cl). In contrast, perforated patch-clamped myocytes demonstrated regulatory volume decreases (RVD) during hyposmotic challenge, and I-Cl was not generated. 2. The swelling-induced I-Cl in conventionally patch-clamped myocytes was inhibited by application of forskolin (15 mu M) and was prevented when the pipette filling solution contained cAMP (10 mu M) and isobutylmethylxanthine (IBMX, 1 mM). I-Cl could also be prevented by inhibition of protein phosphatase activity, using okadaic acid (100 nM). Conversely, a swelling-induced current could be generated in myocytes under perforated patch clamp by inhibition of protein kinase A, using the antagonist Rp-cAMPS (10 mu M). These data demonstrate that cAMP-dependent protein phosphorylation is both necessary and sufficient to prevent development of I-Cl during cell swelling. 3. Unlike other chloride currents described previously in heart muscle, generation of the novel swelling-induced I-Cl requires dephosphorylation of a cAMP-dependent protein phosphorylation site; hence it can be prevented by stimulation of cAMP-dependent protein phosphorylation or by inhibition of protein phosphatase activity.