Eukaryotic cells undergo rapid regulatory processes to maintain cellular homeostasis upon osmotic stress. In fishes, gill epithelial cells play main roles in these processes. Although osmoregulatory functions of fish gills have been well studied, little is known about the underlying mechanisms, particularly the hypertonic-induced signalling pathways during osmotic stress. This study reports for the first time on the osmo-sensing signal cascade that related to the medaka osmotic stress transcription factor 1 (Ostf1), a hypertonic induced immediate early gene, under hypertonic stress. Quantitative real-time PCR showed the rapid increase of Ostf1 in gill after transfer of medaka from fresh water to 50% seawater; particularly Ostf1b whose mRNA expression increased to 4 folds at 0.5h and reached to 10 folds at 6h after the transfer. The in vivo knockdown of Ostf1b profoundly inhibited SEK and JNK phosphorylation, but not p38 and ERK phosphorylation in the medaka gill tissue. To further investigate the possible role of Ostf1b in the JNK pathway, Ostf1b was ectopically expressed in HEK293 cells. Results indicated that Ostf1b is a downstream target of SEK and JNK and exerts a positive feedback loop on the JNK signalling pathway via activation of GCK and/or MLK3 proteins. Additionally, MAPK inhibitors experiments suggested that activation of the JNK pathway by hypertonicity is involved in the maintenance of Ostf1b stability, which in turn provides continuous stimulation of GCK for JNK phosphorylation. Lastly, changes in transcription levels of different water/ion transporters were found in knockdown or ecoptic over-expression of Ostf1b in medaka gills and human embryonic kidney cells, suggesting the role of Ostf1b in modulation of critical water channel/ion transporters during osmotic stress.