Vasopressin regulates human water homeostasis by re-distributing homotetrameric aquaporin-2 (AQP2) water channels from intracellular vesicles to the apical membrane of renal principal cells, a process in which phosphorylation of AQP2 at S256 by cAMP-dependent protein kinase A (PKA) is thought to be essential. Dominant nephrogenic diabetes insipidus (NDI), a disease in which the kidney is unable to concentrate urine in response to vasopressin, is caused by AQP2 gene mutations. Here, we investigated a reported patient case of dominant NDI caused by a novel p.R254Q mutation. Expressed in oocytes, AQP2-p.R254Q appeared to be a functional water channel, but was impaired in its transport to the cell surface to the same degree as AQP2-p.S256A, which mimics non-phosphorylated AQP2. In polarized MDCK cells, AQP2-p.R254Q was retained and was distributed similarly to that of unstimulated wt-AQP2 or AQP2-p.S256A. Upon co-expression, AQP2-p.R254Q interacted with, and retained wt-AQP2 in intracellular vesicles. In contrast to wild-type AQP2, forskolin did not increase AQP2-p.R254Q phosphorylation at S256 or its translocation to the apical membrane. Mimicking constitutive phosphorylation in AQP2-p.R254Q with the p.S256D mutation, however, rescued its apical membrane expression. These date indicate that a lack of S256 phosphorylation is the sole cause of dominant NDI here, and thereby, p.R254Q is a loss of function instead of a gain of function mutation in dominant NDI.