The effects of variations in the extracellular osmolarity on the electrical and mechanical activity of the isolated rat portal vein were studied. Addition of sucrose or xylose (20–100 mmoles/l) to the “normal” solution caused inhibition of contractile activity which could be ascribed to changes in the electrical discharge pattern. Increasing osmolarity with urea produced transient inhibition, return to control activity, and, on return to normal solution, a transient excitation. Reducing osmolarity by 30–60 mOsm/l by decreasing the [Na+] and [Cl] of the medium caused sustained excitation with continuous spike discharge and tetanic contraction. Comparable decreases in the ionic concentrations but with osmotic substitution by sucrose or xylose had little influence on muscle activity. Substituting Na+ and Cl with urea on an equiosmolar basis caused excitation resembling that in hypoosmotic solution. If the smooth muscle cells are looked upon as osmotic cells with membranes that are freely permeable to H2O and urea but less permeable to sugar and ions, the results indicate a consistent correlation between cell volume and state of activity; shrinkage associated with inhibition, swelling with excitation. Changes in the transuiembrane concentration gradients for K+, Na+ and Cl-, caused by the cellular volume changes, are not sufficient to explain the electrical responses. Changes in ionic membrane permeability are assumed to occur.