With-no-lysine (WNK) kinases regulate renal sodium-chloride cotransporter (NCC) to maintain body sodium and potassium homeostasis. Gain-of-function mutations of WNK1 and WNK4 in humans lead to a Mendelian hypertensive and hyperkalemic disease pseudohypoaldosteronism type II (PHAII). X-ray crystal structure and in vitro studies reveal chloride ion (Cl⁻) binds to a hydrophobic pocket within the kinase domain of WNKs to inhibit its activity. The mechanism is thought to be important for physiological regulation of NCC by extracellular potassium. To test the hypothesis that WNK4 senses the intracellular concentration of Cl⁻ physiologically, we generated knockin mice carrying Cl⁻-insensitive mutant WNK4. These mice displayed hypertension, hyperkalemia, hyperactive NCC, and other features fully recapitulating human and mouse models of PHAII caused by gain-of-function WNK4. Lowering plasma potassium levels by dietary potassium restriction increased NCC activity in wild-type, but not in knockin, mice. NCC activity in knockin mice can be further enhanced by the administration of norepinephrine, a known activator of NCC. Raising plasma potassium by oral gavage of potassium inactivated NCC within 1 hour in wild-type mice, but had no effect in knockin mice. The results provide compelling support for the notion that WNK4 is a bona fide physiological intracellular Cl⁻ sensor and that Cl⁻ regulation of WNK4 underlies the mechanism of regulation of NCC by extracellular potassium.