Freshwater-and seawater-acclimated Fundulus heteroclitus were exposed to acute hypoxia (10% air saturation, 3 h), followed by normoxic recovery (3 h). In both salinities, ventilation increased and heart rate fell in the classic manner, while _ M O 2 initially declined by ∼50%, with partial restoration by 3 h of hypoxia, and no O 2 debt repayment during recovery. Gill paracellular permeability (measured with [ 14 C] PEG-4000) was 1.4-fold higher in seawater, and declined by 50% during hypoxia with post-exposure overshoot to 188%. A similar pattern with smaller changes occurred in freshwater. Drinking rate (also measured with [ 14 C] PEG-4000) was 8-fold higher in seawater fish, but declined by ∼90% during hypoxia in both groups, with post-exposure overshoots to ∼270%. Gill diffusive water flux (measured with 3 H 2 O) was 1.9-fold higher in freshwater fish, and exhibited a ∼35% decrease during hypoxia, which persisted throughout recovery, but was unchanged during hypoxia in seawater fish. Nevertheless, freshwater killifish gained mass while seawater fish lost mass during hypoxia, and these changes were not corrected during normoxic recovery. We conclude that this hypoxiatolerant teleost beneficially reduces gill water permeability in a salinity-dependent fashion during hypoxia, despite attempting to simultaneously improve _ M O 2 , but nevertheless incurs a net water balance penalty in both freshwater and seawater.