A population of the Australian mudskipper, Periophthalmus minutus, was found to inhabit mudflat that remained uncovered by tide for more than 20 days in some neap tides. During these prolonged emersion periods, P. minutus retreated into burrows containing little water, with a highest recorded salinity of 84 ± 7.4 psu (practical salinity unit). To explore the mechanical basis for this salinity tolerance in P. minutus, we determined the densities of mitochondria-rich cells (MRCs) in the inner and outer opercula and the pectoral fin skin, in comparison with P. novaeguineaensis, from an adjacent lower intertidal habitat, and studied morphological responses of MRCs to exposure to freshwater (FW), and 100% (34–35 psu) and 200% seawater (SW). Periophthalmus minutus showed a higher density of MRCs in the inner operculum (3365 ± 821 cells mm^-2) than in the pectoral fin skin (1428 ± 161) or the outer operculum (1100 ± 986), all of which were higher than the MRC densities in p. novaeguineaensis. No mortality occurred in 100% or 200% SW, but half of the fish died within four days in FW. Neither 200% SW nor FW exposure affected MRC density. Transfer to 200% SW doubled MRC size after 9–14 days with no change in the proportion of MRCs with apical pits or plasma sodium concentration. In contrast, transfer to FW resulted in a rapid closing of pits and a significant reduction in plasma sodium concentration. These results suggest that P. minutus has evolved morphological and physiological mechanisms to withstand hypersaline conditions that they may encounter in their habitat.