A previous study showed that approximately 25-50% of rabbit ileal brush border (BB) Na(+)/H(+) exchanger NHE3 is in lipid rafts (LR) (Li, X., Galli, T., Leu, S., Wade, J. B., Weinman E. J., Leung, G., Cheong, A., Louvard, D., and Donowitz, M. (2001) J. Physiol. (Lond.) 537, 537-552). Here, we examined the role of LR in NHE3 transport activity using a simpler system: opossum kidney (OK) cells (a renal proximal tubule epithelial cell line) containing NHE3. approximately 50% of surface (biotinylated) NHE3 in OK cells distributed in LR by density gradient centrifugation. Disruption of LR with methyl-beta-cyclodextrin (MbetaCD) decreased NHE3 activity and increased K'(H+)(i), but K(m)((Na+)) was not affected. The MbetaCD effect was completely reversed by repletion of cholesterol, but not by an inactive analog of cholesterol (cholestane-3beta,5alpha,6beta-triol). The MbetaCD effect was specific for NHE3 activity because it did not alter Na(+)-dependent l-Ala uptake. MbetaCD did not alter OK cell BB topology and did not change the surface amount of NHE3, but greatly reduced the rate of NHE3 endocytosis. The effects of inhibiting phosphatidylinositol 3-kinase and of MbetaCD on NHE3 activity were not additive, indicating a common inhibitory mechanism. In contrast, 8-bromo-cAMP and MbetaCD inhibition of NHE3 was additive, indicating different mechanisms for inhibition of NHE3 activity. Approximately 50% of BB NHE3 and only approximately 11% of intracellular NHE3 in polarized OK cells were in LR. In summary, the BB pool of NHE3 in LR is functionally active because MbetaCD treatment decreased NHE3 basal activity. The LR pool is necessary for multiple kinetic aspects of normal NHE3 activity, including V(max) and K'(H+)(i), and also for multiple aspects of NHE3 trafficking, including at least basal endocytosis and phosphatidylinositol 3-kinase-dependent basal exocytosis. Because the C-terminal domain of NHE3 is necessary for its regulation and because the changes in NHE3 kinetics with MbetaCD resemble those with second messenger regulation of NHE3, these results suggest that the NHE3 C terminus may be involved in the MbetaCD sensitivity of NHE3.