Aquaporin-5 (AQP5) is expressed in epithelia of lung, cornea, and various secretory glands, sites where extracellular osmolality is known to fluctuate. Hypertonic aquaporin (AQP) induction has been described, but little is known about the effects of a hypotonic environment on AQP abundance. We report that, when mouse lung epithelial cells were exposed to hypotonic medium, a dose-responsive decrease in AQP5 abundance was observed. Hypotonic reduction of AQP5 was blocked by ruthenium red, methanandamide, and miconazole, agents that inhibit the cation channel transient receptor potential vanilloid (TRPV) 4 present in lung epithelial cells. Several observations indicate that TRPV4 participates in hypotonic reduction of AQP5, including a requirement for extracellular calcium to achieve AQP5 reduction; an increase in intracellular calcium in mouse lung epithelial (MLE) cells after hypotonic stimulation; and reduction of AQP5 abundance after addition of the TRPV4 agonist 4alpha-Phorbol-12,13-didecanoate (4alpha-PDD). Similarly, addition of hypotonic PBS to mouse trachea in vivo decreased AQP5 within 1 h, an effect blocked by ruthenium red. To confirm a functional interaction, AQP5 was expressed in control or TRPV4-expressing human embryonic kidney (HEK) cells. Hypotonic reduction of AQP5 was observed only in the presence of TRPV4 and was blocked by ruthenium red. Combined with earlier studies, these observations indicate that AQP5 abundance is tightly regulated along a range of osmolalities and that AQP5 reduction by extracellular hypotonicity can be mediated by TRPV4. These findings have direct relevance to regulation of membrane water permeability and water homeostasis in epithelia of the lung and other organs.