Gene-targeted mice lacking the NHE3 Na⁺/H⁺ exchanger, which is expressed on apical membranes of small intestinal and colonic epithelial cells, have a severe intestinal absorptive defect and are currently the only animal model of congenital diarrhoea. This phenotype in the NHE3 knockout mouse, and the absence of a similar phenotype in mice lacking NHE2, which is also expressed on apical membranes throughout the intestinal tract, indicates that NHE3 is the major Na⁺/H⁺ exchanger that functions in concert with apical Cl^–/HCO₃^– exchange to mediate electroneutral absorption of NaCl from the lumen of the gut. The epithelial Na⁺ channel (ENaC) and colonic H⁺,K⁺-ATPase were upregulated in the colon of NHE3 null mutants, suggesting that the activity of a coupled system consisting of ENaC, the apical K⁺ channel, and the colonic H⁺,K⁺-ATPase, which together mediate Na⁺/H⁺ exchange across the apical membrane, is the major mechanism that compensates for the loss of NHE3 in the colon. To test the role of the colonic H⁺,K⁺-ATPase in this system, ENaC activity in the colon of wild-type and colonic H⁺,K⁺-ATPase knockout mice was examined during dietary Na⁺ depletion, which increases serum aldosterone and shifts the mechanism of Na⁺ recovery to electrogenic absorption via ENaC. ENaC activity was sharply depressed in the colonic H⁺,K⁺-ATPase knockout, demonstrating that the H⁺,K⁺-ATPase is needed for maximum Na⁺ absorption via ENaC. To identify molecular changes underlying compensatory mechanisms activated in the small intestine, cDNA microarrays and Northern blot analyses were used to compare global mRNA expression patterns in small intestine of NHE3-deficient and wild-type mice. Among the genes identified were members of the RegIII family of growth factors, which may contribute to the increased absorptive area in the NHE3 knockout intestine, and a large number of interferon-λ responsive genes. The latter finding is of particular interest as interferon-λ has been shown to reduce secretion in both cultured intestinal epithelial cells and in the NHE3-deficient small intestine via a mechanism involving down-regulation of the apical CFTR Cl^– channel and the basolateral Na⁺-K⁺-2Cl^– cotransporter. Serum interferon-λ was elevated fivefold in NHE3-deficient mice; however, there was no evidence of inflammation, and unlike conditions such as inflammatory bowel disease, levels of other cytokines were unchanged. In addition, quantitative PCR analysis showed that upregulation of interferon-λ mRNA was localized to the small intestine and did not occur in colon, spleen, or kidney. These in vivo data suggest that elevated interferon-λ, produced by gut-associated lymphoid tissue in the small intestine, is part of a homeostatic mechanism that is activated in response to the intestinal absorptive defect in order to regulate the fluidity of the intestinal tract.