Claudin-17 is a paracellular channel-forming tight junction protein. Unlike the cation channels claudin-2 and -15, claudin-17 forms a distinct anion-selective channel. Aim of this study was to determine the molecular basis of channel formation and charge selectivity of this protein. To achieve this, residues located in the extracellular loops (ECL) 1 and 2 of claudin-17 were substituted, preferably those whose charges differed in claudin-17 and in claudin-2 or -15. The respective mutants were stably expressed in MDCK C7 cells and their ability to form charge-selective channels was analyzed by measuring ion permeabilities and transepithelial electrical resistance. The functional data were combined with homology modeling of the claudin-17 protomer using the structure of claudin-15 as template. In ECL1, K65, R31, E48, and E44 were found to be stronger involved in Cldn17 channel function than the clustered R45, R56, R59, and R61. For K65, not only charge but also stereochemical properties were crucial for formation of the anion-selective channel. In ECL2, both Y149 and H154 were found to contribute to constitution of the anion channel in a distinct manner. In conclusion, we provide insight into the molecular mechanism of the formation of charge- and size-selective paracellular ion channels. In detail, we propose a hydrophilic furrow in the claudin-17 protomer spanning from a gap between the ends of TM2 and TM3 along R31, E48, and Y67 to a gap between K65 and S68 lining the anion channel.