Polycystic kidney diseases result from disruption of the genetically defined program that controls the size and geometry of renal tubules. Cysts which frequently arise from the collecting duct (CD) result from cell proliferation and fluid secretion. From mCCD(cl1) cells, a differentiated mouse CD cell line, we isolated a clonal subpopulation (mCCD-N21) that retains morphogenetic capacity. When grown in three-dimensional gels, mCCD-N21 cells formed highly organized tubular structures consisting of a palisade of polarized epithelial cells surrounding a cylindrical lumen. Subsequent addition of cAMP-elevating agents (forskolin or cholera toxin) or of membrane-permeable cAMP analogs (CPT-cAMP) resulted in rapid and progressive dilatation of existing tubules, leading to the formation of cystlike structures. When grown on filters, mCCD-N21 cells exhibited a high transepithelial resistance as well as aldosterone- and/or vasopressin-induced amiloride-sensitive and -insensitive current. The latter was in part inhibited by Na(+)-K(+)-2Cl(-) cotransporter (bumetanide) and chloride channel (NPPB) inhibitors. Real-time PCR analysis confirmed the expression of NKCC1, the ubiquitous Na(+)-K(+)-2Cl(-) cotransporter and cystic fibrosis transmembrane regulator (CFTR) in mCCD-N21 cells. Tubule enlargement and cyst formation were prevented by inhibitors of Na(+)-K(+)-2Cl(-) cotransporters (bumetanide or ethacrynic acid) or CFTR (NPPB or CFTR inhibitor-172). These results further support the notion that cAMP signaling plays a key role in renal cyst formation, at least in part by promoting chloride-driven fluid secretion. This new in vitro model of tubule-to-cyst conversion affords a unique opportunity for investigating the molecular mechanisms that govern the architecture of epithelial tubes, as well as for dissecting the pathophysiological processes underlying cystic kidney diseases.