Osmotic homeostasis is one of the most aggressively defended physiological parameters in vertebrates. However, the molecular mechanisms underlying osmotic regulation are poorly understood. The transient receptor potential channel, vanilloid subfamily (TRPV4), is an osmotically activated ion channel that is expressed in circumventricular organs in the mammalian CNS, which is an important site of osmotic sensing. We have generated trpv4-null mice and observed abnormalities of their osmotic regulation. trpv4^-/- mice drank less water and became more hyperosmolar than did wild-type littermates, a finding that was seen with and without administration of hypertonic saline. In addition, plasma levels of antidiuretic hormone were significantly lower in trpv4^-/- mice than in wild-type littermates after a hyperosmotic challenge. Continuous s.c. infusion of the antidiuretic hormone analogue, dDAVP, resulted in systemic hypotonicity in trpv4^-/- mice, despite the fact that their renal water reabsorption capacity was normal. Thus, the response to both hyper- and hypoosmolar stimuli is impaired in trpv4^-/- mice. After a hyperosmolar challenge, there was markedly reduced expression of c-FOS in the circumventricular organ, the organum vasculosum of the lamina terminalis, of trpv4^-/- mice compared with wild-type mice. This finding suggests that there is an impairment of osmotic sensing in the CNS of trpv4^-/- mice. These data indicate that TRPV4 is necessary for the normal response to changes in osmotic pressure and functions as an osmotic sensor in the CNS.