Arginine vasopressin is a nine-amino acid neuropeptide hormone important in the regulation of water metabolism. It also may have a role in other physiological functions, such as blood pressure regulation and the response to stress. Whole animal studies have provided a good understanding of vasopressin physiology and regulation of the normal vasopressin gene, and in vitro cell culture studies have demonstrated important features of the intracellular regulation of vasopressin gene expression. Transgenic mice provide useful models for the study of the in vivo regulation of gene expression. Previously reported mouse lines transgenic with vasopressin gene constructs have not expressed the transgene in a tissue distribution similar to that detected for the endogenous mouse vasopressin gene. An 8.2-kb genomic construct of the rat vasopressin gene, including 3 kb each of 5' and 3' flanking sequences, has been used to develop a line of transgenic mice. These animals express the transgene in a tissue-specific manner, demonstrate appropriate osmotic regulation of transgenic vasopressin mRNA, and have normal water metabolism. Animals homozygous for the 8.2-kb transgene have increased basal plasma levels of vasopressin peptide but have no apparent change in basal water metabolism. The findings with this and other previously reported mouse lines transgenic for vasopressin constructs provide a basis for developing future transgenic lines to study the in vivo regulation of the vasopressin gene.