The membrane protein KCNE1 has been implicated in cell volume regulation. Using a knockout mouse model, this study examined the role of KCNE1 in regulatory volume decrease (RVD) in freshly isolated renal proximal tubule cells. Cell diameter was measured using an optical technique in response to hypotonic shock and stimulation of Na+‐alanine cotransport in cells isolated from wild‐type and KCNE1 knockout mice. In HEPES buffered solutions 64% of wild‐type and 56% of knockout cells demonstrated RVD. In HCO−3 buffered solutions 100% of the wild‐type cells showed RVD, while in the knockout cells the proportion of cells displaying RVD remained unchanged. RVD in the knockout cells was rescued by valinomycin, a K+ ionophore. In wild‐type HCO−3 dependent cells the K+ channel inhibitors barium and clofilium inhibited RVD. These data suggest that mouse renal proximal tubule is comprised of two cell populations. One cell population is capable of RVD in the absence of HCO−3, whereas RVD in the other cell population has an absolute requirement for HCO−3. The HCO−3 dependent RVD requires the normal expression of KCNE1.