TNF-alpha is believed to play a pivotal role in the pathogenesis of inflammatory bowel diseases which have diarrhea as one of their symptoms. This work studies the effect of the cytokine on electrolyte and water movements in the rat distal colon using an intestinal perfusion technique and attempts to determine its underlying mechanism of action. TNF-alpha inhibited net water and chloride absorption, down-regulated in both surface and crypt colonocytes the Na+-K+-2Cl- cotransporter, and reduced the protein expression and activity of the Na+-K+ ATPase. Indomethacin up-regulated the pump and the cotransporter in surface cells but not in crypt cells, and in its presence, TNF-alpha could not exert its effect, suggesting an involvement of PGE2 in the cytokine action. The effect of TNF-alpha on the pump and symporter was studied also in cultured Caco-2 cells in isolation of the effect of other cells and tissues, to test whether the cytokine acts directly on intestinal cells. In these cells, TNF-alpha and PGE2 had a similar effect on the pump expression and activity as that observed in crypt cells but were without any effect on the Na+-K+-2Cl- cotransporter. It was concluded that the effect of the cytokine on colonocytes is mediated via PGE2. By inhibiting the Na+-K+ ATPase, it reduces the Na+ gradient needed for NaCl absorption, and by down-regulating the expression of the Na+-K+-2Cl- symporter, it reduces basolateral Cl- entry and luminal Cl- secretion. The inhibitory effect on absorption is more significant than the inhibitory effect on secretion resulting in a decrease in net electrolyte uptake and consequently in more water retention in the lumen.