Two major isoforms of aquaporin-4 (AQP4) have been described in human tissue. Here we report the identification and functional analysis of an alternatively spliced transcript of human AQP4, AQP4-Δ4, that lacks exon 4. In transfected cells AQP4-Δ4 is mainly retained in the endoplasmic reticulum and shows no water transport properties. When AQP4-Δ4 is transfected into cells stably expressing functional AQP4, the surface expression of the full-length protein is reduced. Furthermore, the water transport activity of the cotransfectants is diminished in comparison to transfectants expressing only AQP4. The observed down-regulation of both the expression and water channel activity of AQP4 is likely to originate from a dominant-negative effect caused by heterodimerization between AQP4 and AQP4-Δ4, which was detected in coimmunoprecipitation studies. In skeletal muscles, AQP4-Δ4 mRNA expression inversely correlates with the level of AQP4 protein and is physiologically associated with different types of skeletal muscles. The expression of AQP4-Δ4 may represent a new regulatory mechanism through which the cell-surface expression and therefore the activity of AQP4 can be physiologically modulated.