The renal collecting duct is a heterogenous epithelium consisting of intercalated cells (ICCs) and principal cells (PCs). To test the hypothesis that the two cell types might originate from one another and to determine which one of the two is a stem cell, beta-ICCs and PCs were isolated by fluorescence-activated cell sorting and grown on permeable supports. Cultures of sorted PCs maintained their PC phenotype [electrogenic sodium (Na+) reabsorption and potassium (K+) secretion and expression of PC-specific antigens]. In contrast, cultures of sorted beta-ICCs acquired alpha-ICC-specific functions (e.g. proton secretion) and gradually expressed functions specific for PCs (amiloride-blockable Na+ current and K+ secretion). Most cells in cultures of sorted beta-ICCs also acquired a central cilium, a characteristic feature of PCs. Dual-staining of beta-ICC cultures with cell-specific antibodies against surface antigens revealed that approximately 45% of the cells expressed only ICC-specific antigens and approximately 20% expressed only PC antigens. The remainder of the cells were ICC/PC "hybrids" and stained for both markers. Such hybrid cells were also observed in situ, albeit with a lower frequency, on kidney sections dual-stained with cell type-specific markers. The proliferation rate of the two cell types, assessed by pulse labeling cells in S-phase with bromodeoxyuridine or staining with an antibody against a proliferation antigen (KI-67), revealed a significantly higher proliferation rate among beta-ICCs than PCs. In aggregate, these data suggest that beta-ICCs in culture are capable of differentiating into alpha-ICCs and PCs and raise the possibility that beta-ICC is the stem cell of the collecting duct.