The regulation and preservation of distinct intracellular and extracellular solute microenvironments is crucial for the maintenance of cellular homeostasis. In mammals, the kidneys control bodily salt and water homeostasis. Specifically, the urine-concentrating mechanism within the renal medulla causes fluctuations in extracellular osmolarity, which enables cells of the kidney to either conserve or eliminate water and electrolytes, depending on the balance between intake and loss. However, relatively little is known about the subcellular and molecular changes caused by such osmotic stresses. Advances have shown that many cells, including those of the kidney, rapidly (within seconds) and reversibly (within minutes) assemble membraneless, nano-to-microscale subcellular assemblies termed biomolecular condensates via the biophysical process of hyperosmotic phase separation (HOPS). Mechanistically, osmotic cell compression mediates changes in intracellular hydration, concentration and molecular crowding, rendering HOPS one of many related phase-separation phenomena. Osmotic stress causes numerous homo-multimeric proteins to condense, thereby affecting gene expression and cell survival. HOPS rapidly regulates specific cellular biochemical processes before appropriate protective or corrective action by broader stress response mechanisms can be initiated. Here, we broadly survey emerging evidence for, and the impact of, biomolecular condensates in nephrology, where initial concentration buffering by HOPS and its subsequent cellular escalation mechanisms are expected to have important implications for kidney physiology and disease.