The Nuclear Factor of Activated T Cells-5 (NFAT5), also known as OREBP or TonEBP, is a member of the nuclear factors of the activated T cells family of transcription factors. It is also the only known tonicity-regulated transcription factor in mammals. NFAT5 was initially known for its role in the hypertonic kidney inner medulla for orchestrating a genetic program to restore the cellular homeostasis. Emerging evidence, however, suggests that NFAT5 might play a more diverse functional role, including a pivotal role in blood pressure regulation and the development of autoimmune diseases. Despite the growing significance of NFAT5 in physiology and diseases, our understanding of how its activity is regulated remains very limited. Furthermore, how changes in tonicities are converted into functional outputs via NFAT5 remains elusive. Therefore, this review aims to summarize our current knowledge on the functional roles of NFAT5 in osmotic stress adaptation and the signaling pathways that regulate its activity.