The oxygen consumption of liver slices from adult rats was not significantly affected by the concentration of the medium when this lay between 0.20 and 0.45 OSM/l. Alterations outside this range in either direction reduced the uptake of oxygen. Slices respiring at 38.5 degrees C in solutions varying from 0.10 to 0.58 OSM/l, always contained less water than slices in similar solutions at temperatures between 1 and 3 degrees C. This difference was most noticeable with concentrations which did not inhibit respiration. When the oxygen uptake of slices in 0.30 OSM media at 38.5 degrees C was inhibited by cyanide, the water content of the slices increased. Oxygen consumption increased and water content decreased again when cyanide was removed from the media. Small concentrations of 2, 4-dinitrophenol increased and larger concentrations reduced the uptake of oxygen, but both increased the amount of water in the tissue. The results suggest that the intracellular fluids are hypertonic, and that respiration governs the water balance of the tissue because some of the energy which it releases is used for active transport of water out of the cells through the mediation of compounds containing high-energy phosphate bonds. It is suggested that cloudy swelling results from a disturbance of the active transport of water.