Atrial natriuretic factor (ANF) is a peptide hormone that causes a large increase in urinary sodium chloride and water excretion when its plasma concentration rises above basal levels. As yet, there is no consensus regarding the chief site of action of ANF in the kidney. We microdissected and perfused rat cortical collecting ducts in vitro to determine whether ANF-(1-28) can directly inhibit net sodium and fluid absorption. ANF decreased both net sodium absorption and vasopressin-stimulated net fluid absorption by 50-90% when added to the peritubular bath solution. Approximately 50% inhibition of net fluid absorption occurred at 0.1 nM ANF, a level equivalent to plasma concentrations in volume-expanded rats. The action of ANF was mimicked by the addition of exogenous guanosine 3',5'-cyclic monophosphate. If ANF has a similar action on the cortical collecting duct in vivo, it could account for a substantial part of the ANF-mediated increase in urinary sodium and water excretion.