The renal collecting duct is a heterogenous epithelium consisting of intercalated cells (ICC) and principal cells (PC). The origin of this cellular heterogeneity is not clear. To test the hypothesis that the two cell types might originate from one another, pure populations of ICC (beta subtype) and PC were isolated by fluorescence-activated cell sorting and grown on permeable supports. After the monolayers reached confluence, the expression of ICC- and PC-specific functions and antigens was monitored. Cultures of sorted beta-ICC, in addition to expressing ICC-specific functions (such as an electrogenic H+ secretion) and antigens, progressively acquired PC functions (amiloride-sensitive Na+ transport and K+ secretion). On day 6, cultures of sorted beta-ICC exhibited a lumen-negative transepithelial potential difference of 83 +/- 4 mV and a short circuit current of 107 +/- 15 microA/cm2 and created a lumen-to-bath K+ concentration ratio of approximately 10. The percentage of cells staining with two PC-specific antibodies was 53% and 65%. On the other hand, cultures of sorted PC failed to acquire ICC-specific functions while maintaining PC characteristics. To rule out preferential proliferation of a few contaminating PC as an explanation of these results, we have generated a continuous collecting duct cell line (M-1) originating from mice transgenic for the early region of simian virus 40. Cell lines cloned from M-1 cells exhibit both PC and ICC functions and show mutually exclusive heterogenous expression of PC and ICC antigens, demonstrating a common origin of the two cell types. These data indicate that while beta-ICC in culture can give rise to both alpha-ICC and PC, PC cannot convert to ICC, which raises the possibility that beta-ICC is the stem cell in the renal collecting duct. Differentiation of ICC to PC may explain the cellular heterogeneity in the cortical collecting duct.