Organisms exposed to the damaging effects of high osmolarity accumulate solutes to increase cytoplasmic osmolarity. Yeast accumulates glycerol in response to osmotic stress, activated primarily by MAP kinase Hog1 signaling. A pathway regulated by protein kinase C (PKC1) also responds to changes in osmolarity and cell wall integrity. C. elegans accumulates glycerol when exposed to high osmolarity, but the molecular pathways responsible for this are not well understood. We report the identification of two genes, osm-7 and osm-11, which are related members of a novel gene family. Mutations in either gene lead to high internal levels of glycerol and cause an osmotic resistance phenotype (Osr). These mutants also have an altered defecation rhythm (Dec). Mutations in cuticle collagen genes dpy-2, dpy-7, and dpy-10 cause a similar Osr Dec phenotype. osm-7 is expressed in the hypodermis and may be secreted. We hypothesize that osm-7 and osm-11 interact with the cuticle, and disruption of the cuticle causes activation of signaling pathways that increase glycerol production. The phenotypes of osm-7 are not suppressed by mutations in MAP kinase or PKC pathways, suggesting that C. elegans uses signaling pathways different from yeast to mount a response to osmotic stress.