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Regeneration and functional recovery of the hypothalamoneurohypophysial system (HNS) in neurohypophysectomized rats treated with either saline or vasopressin (VP) were analyzed utilizing specific immunohistochemical and physiological measures. Neural lobe ablation combined with VP administration precipitated a profound diabetes insipidus (following cessation of VP delivery) that persisted for the duration of the experiment. Diabetes insipidus was correlated with a drastic reduction in the number of VP-positive neurons in magnocellular hypothalamic nuclei. In contrast, large numbers of oxytocin (OT)- positive neurons survived neurohypophysectomy in VP-treated neurohypophysectomized rats; OT neurons accounted for the vast majority of magnocellular profiles observed in Nissl-counterstained sections. VP- immunoreactive fibers could be observed in limited quantities in the external lamina of the median eminence of VP-treated neurohypophysectomized rats, with little staining evident in the internal lamina. Saline-treated neurohypophysectomized rats exhibited the recovery of antidiuretic function characteristically seen following this lesion, with evidence of survival of considerable numbers of VP and OT neurons and median eminence hypertrophy. Both the internal and external laminae of the median eminence were densely innervated by large-caliber VP and OT fibers. Sham-operated animals receiving VP treatment did not show any long-term deficit in water metabolism, changes in the complement of VP or OT perikarya in hypothalamus, or changes in the innervation of the median eminence. Results indicate that VP treatment following neurohypophysectomy results in extensive retrograde degeneration of magnocellular VP neurons without affecting the survival of OT cells.