The present studies are concerned with a detailed examination of the apparent anomalous osmotic behavior of human red cells. Red cell water has been shown to behave simultaneously as solvent water for nonelectrolytes and nonsolvent water, in part, for electrolytes. The nonsolvent properties are based upon assumptions inherent in the conventional van't Hoff equation. However, calculations according to the van't Hoff equation give osmotic volumes considerably in excess of total cell water when the pH is lowered beyond the isoelectric point for hemoglobin; hence the van't Hoff equation is inapplicable for the measurement of the solvent properties of the red cell. Furthermore, in vitro measurements of osmotic and other properties of 3.7 millimolal solutions of hemoglobin have failed to reveal the presence of any salt exclusion. A new hypothesis has been developed from thermodynamic principles alone, which predicts that, at constant pH, the net charge on the hemoglobin molecule decreases with increased hemoglobin concentration. The existence of such cooperative interaction may be inferred from the effect of pH on the changes in hemoglobin net charge as the spacing between the molecules decreases. The resultant movement of counterions across the cell membrane causes the apparent anomalous osmotic behavior. Quantitative agreement has been found between the anion shift predicted by the equation and that observed in response to osmotic gradients. The proposed mechanism appears to be operative in a variety of tissues and could provide an electrical transducer for osmotic signals.