Nephrogenic diabetes insipidus (NDI) is characterized by resistance of the kidney to the action of arginine-vasopressin (AVP); it may be due to genetic or acquired causes. Recent advances in molecular genetics have allowed the identification of the genes involved in congenital NDI. While inactivating mutations of the vasopressin V2 receptor are responsible for X-linked NDI, autosomal recessive NDI is caused by inactivating mutations of the vasopressin-regulated water channel aquaporin-2 (AQP-2). About 70 different mutations of the V2 receptor have been reported, most of them missense mutations. The functionally characterized mutants show a loss of function due to defects in their synthesis, processing, intracellular transport, AVP binding, or interaction with the G protein/adenylyl cyclase system. Thirteen different mutations of the AQP-2 gene have been reported. Functional studies of three AQP-2 mutations reveal impaired cellular routing as the main defect. The great number of different mutations with various functional defects hinders the development of a specific therapy. Gene therapy may, however, eventually become applicable to the congenital forms of NDI. At present all gene-therapeutic approaches lack safety and efficiency, which is of particular relevance in a disease that is treatable by an adequate water intake. The progress with regard to the molecular basis of antidiuresis contributes to the understanding of acquired forms of NDI on a molecular level. Recent data show that lithium dramatically reduces the expression of AQP-2. Likewise, hypokalemia reduces the expression of this water channel. The exact mechanisms leading to this reduced expression of AQP-2 remain to be determined.