Nephrogenic diabetes insipidus (NDI) is a rare X-linked disorder associated with renal tubule resistance to arginine vasopressin (AVP). To understand the mechanisms of AVP resistance underlying this disorder, we have analyzed the vasopressin V2 receptor gene in two unrelated Japanese kindreds with NDI and expressed the mutants to characterize their functional properties. Direct sequencing revealed two V2 receptor gene mutations: a missense mutation from Arg202 to Cys in the third extracellular domain (R202C) and a single base insertion (G) in two consecutive GGG triplets (nucleotide 804 to 809) in the third cytoplasmic domain, resulting in a frame shift with premature termination at codon 258 (804insG). Transient expression study with COS-7 cells showed that R202C mutation reduced both binding affinity (15%) and capacity (30%), while 804insG mutation abolished binding ability. For further evaluation of the binding ability of the R202C mutant, we expressed the mutants in Chinese hamster ovary (CHO) cells. Although the mutant cell lines produced V2 receptor mRNA comparable levels to the wild-type receptor cell lines, R202C mutant cell lines had no binding ability. Our results suggest an introduction of a new cysteine residue in the extracellular domain and a receptor truncation removing one third of the carboxyl terminus could impair ligand binding activity of the V2 receptor through a post-transcriptional mechanism, thereby causing AVP resistance in the NDI patients.