Alterations in cellular hydration not only contribute to metabolic regulation, but also critically determine the cellular response to different kinds of stress. Whereas cell swelling triggers anabolic pathways and protects cells from heat and oxidative challenge, cellular dehydration contributes to insulin resistance and catabolism and increases the cellular susceptibility to stress-induced damage. Intracellular accumulation of organic osmolytes, cell cycle delay and the expression of heat shock proteins provide cellular tolerance to hyperosmolarity and protect against stressors under dehydrating conditions. This article discusses some mechanisms by which alterations in cell hydration contribute to cytoprotection or cell damage. In addition, the close relationship between osmotic and oxidative stress and the contribution of isoosmotic shrinkage to apoptotic cell death are considered.