Objective: Prostasin (CAP1) is a glycosylphosphatidylinositol (GPI) anchored serine protease necessary for acquisition of barrier function in epidermis. We hypothesized that prostasin is essential for postnatal development of high resistance renal collecting duct epithelium governed by glucocorticoid. Methods and Results: In rat kidney cortex and medulla, prostasin mRNA level increased significantly between birth and weaning (day 21), independent of adrenal steroids, and was detected in collecting ducts. Mouse cortical collecting duct cells (M-1) were seeded at 4 x 10⁵ cells/ml and during 7 days exhibited a significant increase in prostasin mRNA and protein level (~2 times), an increase in transepithelial resistance (TER) and –voltage (TEV). The non-selective serine protease inhibitor aprotinin inhibited development of TER and TEV and led to aberrant localization of E- cadherin, when added to the apical but not the basolateral side of M-1 monolayers. This effect on TEV and TER was mimicked by the prostasin inhibitor nafamostat. Apical addition of phosphoinositide-specific phospholipase C which cleaves GPI anchors released prostasin to the medium and impaired development of TER. Disruption of lipid rafts by methyl-b- cyclodextrin attenuated development of TER and TEV. Omission of the synthetic glucocorticoid dexamethasone impaired development of TER and TEV, but had no effect on prostasin protein abundance and did not affect E-cadherin redistribution. Aldosterone was no substitute for dexamethasone and mineralocorticoid receptor antagonists did not impair the effect of dexamethasone on TER. Conclusion: apical, GPI- anchored, lipid raft-associated serine protease activity, compatible with prostasin, is necessary for establishment of tight collecting duct epithelium independently of glucocorticoid