A method was developed to measure the osmotic water permeability (P_f) of plasma membranes in cell layers and applied to cells and epithelia expressing molecular water channels. It was found that the integrated intensity of monochromatic light in a phase contrast or dark field microscope was dependent on relative cell volume. For cells of different size and shape (Sf9, MDCK, CHO, A549, tracheal epithelia, BHK), increased cell volume was associated with decreased signal intensity; generally the signal decreased 10–20% for a twofold increase in cell volume. A theory relating signal intensity to relative cell volume was developed based on spatial filtering and changes in optical path length associated with cell volume changes. Theory predictions were confirmed by signal measurements of cell layers bathed in solutions of various osmolarities and refractive indices. The excellent signal-to-noise ratio of the transmitted light detection permitted measurement of cell volume changes of <1%. The method was applied to characterize transfected cells and tissues that natively express water channels. P_f in control Chinese hamster ovary cells was low (0.0012 cm/s at 23°C) and increased more than fourfold upon stable transfection with aquaporins 1, 2, 4, or 5. P_f in apical and basolateral membranes in polarized epithelial cells grown on porous supports was measured. P_f^bl and P_f^ap were 0.0011 and 0.0024 cm/s (MDCK cells), and 0.0039 and 0.0052 cm/s (human tracheal cells) at 23°C. In intact toad urinary bladder, basolateral P_f was 0.036 cm/s and apical membrane P_f after vasopressin stimulation was 0.025 cm/s at 23°C. The results establish light microscopy with spatial filtering as a technically simple and quantitative method to measure water permeability in cell layers and provide the first measurement of the apical and basolateral membrane permeabilities of several important epithelial cell types.