Hypoalbuminemia is an important risk factor for increased morbidity and mortality in patients on dialysis. Hypoalbuminemia is usually attributed to malnutrition or a state of chronic inflammation. However, hypoalbuminemia could result from hemodilution caused by chronic volume expansion. We prospectively evaluated 142 patients on chronic dialysis for 12 consecutive months (mean age: 62 +/- 14 years; 41% women, 37% African American, 43% diabetic, 27% peritoneal dialysis). Intracellular (ICW) and extracellular (ECW) water content was estimated using single frequency bioelectrical impedance. Values in each albumin grouping (group 1, < 3.5 g/dl; group 2, 3.5-4.0 g/dl; group 3, > 4.1 g/dl) are expressed as annual mean +/- SEM. Group 1 patients had lower body weight, body mass index, blood urea nitrogen, serum creatinine, dietary protein intake, and ICW content than those in groups 2 and 3. ECW was significantly increased in group 1 when compared with groups 2 and 3 (p < 0.001). A significant correlation was found between ECW and serum albumin concentration (R = 0.2230; p < 0.0001). Resistance and reactance were decreased in group 1 when compared with groups 2 and 3 (p < 0.05 and 0.001, respectively), causing the resultant bioimpedance vector to move away from the normal population range into the overhydration boundaries. We conclude that, in addition to malnutrition and chronic inflammation, overhydration is a contributor to hypoalbuminemia in patients on chronic dialysis.