Claudin-16 (paracellin-1) is a tight junction protein localized mainly in the thick ascending limb of Henle's loop and also in the distal nephron. Its defect causes familial hypomagnesaemia with hypercalciuria and nephrocalcinosis. This had been taken as an indication that claudin-16 conveys paracellular Mg(2+) and Ca(2+) transport; however, evidence is still conflicting. We studied paracellular ion permeabilities as well as effects of claudin-16 on the driving forces for passive ion movement. MDCK-C7 cells were stably transfected with wild-type (wt) and mutant (R146T, T233R) claudin-16. Results indicated that paracellular permeability to Mg(2+) but not to Ca(2+) is increased in cells transfected with wt compared to mutant claudin-16 and control cells. Increased basolateral Mg(2+) concentration activated a transcellular Cl(-) current which was greatly enhanced in cells transfected with wt and T233R claudin-16, as compared to R146T claudin-16-transfected or control cells. This current was triggered by the basolateral calcium-sensing receptor causing Ca(2+) release from internal stores, thus activating apical Ca(2+)-sensitive Cl(-) channels and basolateral Ca(2+)-sensitive K(+) channels. Immunohistochemical data suggest that the Cl(-) channel involved is bestrophin. We conclude that claudin-16 itself possesses only moderate paracellular Mg(2+) permeability but governs transcellular Cl(-) currents by interaction with apical Ca(2+)-activated Cl(-) channels, presumably bestrophin. As the transepithelial voltage generated by such a current alters the driving force for all ions, this may be the major mechanism to regulate Mg(2+) and Ca(2+) absorption in the kidney.