1. 1. Water balance and maximum urine concentrating capacity were studied in twenty-one specimens of Aplodontia rufa, the Mountain Beaver. 2. 2. Anatomical findings are consistent with the hypothesis of countercurrent gradient and countercurrent multiplication. 3. 3. Water balance studies demonstrated a mean water intake of 32·7 percent ± S. E. 2·4 per cent of body weight; urinary output accounts for most of the water loss. 4. 4. Water deprivation studies with and without oral solute loading demonstrated a maximum U/ P ratio of 2·46 for osmotic concentration in this species. Data are consistent with the countercurrent hypothesis. 5. 5. Physiological data are consistent with the origin of countercurrent gradient either in the loop of Henle or the collecting ducts of the kidneys in the medullary region. 6. 6. Inability to concentrate urine and the necessity of a large daily water intake may account for the limited distribution of these animals in wet, western slopes of the Pacific Coast areas. Before the uplift of the Sierra, these animals ranged through the Great Basin area.
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