Astrocytes express potassium and water channels to support dynamic regulation of potassium homeostasis. Potassium kinetics can be modulated by aquaporin-4 (AQP4), the essential water channel for astrocyte water permeability regulation. We investigated whether extracellular potassium ([K(+)](o)) can regulate astrocyte water permeability and the mechanisms of such an effect. Studies were performed on rat primary astrocytes and a rat astrocyte cell line transfected with AQP4. We found that 10 mM [K(+)](o) caused an immediate, more than 40%, increase in astrocyte water permeability which was sustained in 5 min. The water channel AQP4 was a target for this regulation. Potassium induced a significant increase in intracellular cAMP as measured with a FRET based method and with enzyme immunoassay. We found that protein kinase A (PKA) could phosphorylate AQP4 in vitro. Further elevation of [K(+)](o) to 35 mM induced a global intracellular calcium response and a transient water permeability increase that was abolished in 5 min. When inwardly rectifying potassium (Kir)-channels were blocked, 10 mM [K(+)](o) also induced a calcium increase and the water permeability increase no longer persisted. In conclusion, we find that elevation of extracellular potassium regulates AQP4 and astrocyte water permeability via intracellular signaling involving cAMP. A prolonged increase of astrocyte water permeability is Kir-channel dependent and this response can be impeded by intracellular calcium signaling. Our results support the concept of coupling between AQP4 and potassium handling in astrocytes.