Autosomal dominant familial neurohypophyseal diabetes insipidus is caused by mutations in the arginine vasopressin (AVP) gene. We demonstrated recently that mutant AVP precursors accumulate within the endoplasmic reticulum of neuronal cells, leading to cellular toxicity. In this study, the possibility that mutant AVP precursors interact with wild-type (WT) proteins to alter their processing and function was explored. WT and mutant precursors were epitope-tagged to allow them to be distinguished in transfected cells. An in vivo cross-linking reaction revealed homo- and heterodimer formation between WT and mutant precursors. Mutant precursors were also shown to impair intracellular trafficking of WT precursors from the endoplasmic reticulum to the Golgi apparatus. In addition to the cytotoxicity caused by mutant AVP precursors, the interaction between the WT and mutant precursors suggests that a dominant-negative mechanism may also contribute to the pathogenesis of familial neurohypophyseal diabetes insipidus.