Renal disease is a common complication of diabetes. The initiating events in diabetic nephropathy are triggered by hyperglycemia and, possibly, advanced glycation end products. Subsequently, excess levels of vasoactive peptides (especially endothelin-1 (ET-1)) accumulate in the diabetic kidney, and there is evidence that these peptides mediate many of the pathophysiological changes associated with diabetic renal disease. These changes include an excess deposition of extracellular matrix proteins into the glomerular basement membrane and renal mesangial cell hypertrophy. Our transcriptional profiling studies have revealed that the p8 gene, which encodes a putative basic helix-loop-helix protein, is strongly induced in ET-1-treated renal mesangial cells and in an animal model of diabetic nephropathy. RNA interference experiments indicated that the p8 gene is required for ET-1-induced mesangial cell hypertrophy. Here, we show that the p8 polypeptide is a phosphoprotein subject to constitutive degradation by the ubiquitin/proteasome system. This degradation is mediated by phosphatidylinositol 3-kinase and protein kinase B/Akt. By contrast, stabilization of the p8 protein requires glycogen synthase kinase-3. Finally, short interfering RNA-mediated RNA interference experiments indicated that ET-1-stimulated mesangial cell hypertrophy and p8 mRNA induction require the NFAT4 transcription factor. Thus, p8 levels in the cell are likely maintained by a balance between signal-dependent transcriptional induction and proteolysis.