During the response to metabolic acidosis, the intercalated cell of the collecting tubule converts from one that secretes HCO3(-) to one that absorbs HCO3(-) by H(+) secretion. The molecular basis of this complex change in phenotype was studied in an immortalized intercalated cell line. We found that it was induced by secretion, polymerization, and deposition of a protein, which we termed hensin, into the extracellular matrix. Surprisingly, this change in phenotype is identical to terminal differentiation of epithelial cells in that it recapitulated all the characteristics of terminal differentiation, including a change in cell shape, acquisition of specialized apical structures (microvilli and ruffles), and the ability to secrete and endocytose materials in a regulated manner from the apical membrane. Hensin is expressed in most epithelia, and others have discovered that it is deleted in a large number of epithelial tumors. These results suggest that conversion of polarity of the intercalated cells represents a process of terminal differentiation.