The mechanism of signal transmission, conversion and multiplication at molecular level has been of great interest lately, due to its wide applications in nanoscience and nanotechnology. The interferences between authentic signals and thermal noises at the nanoscale make it difficult for molecular signal transduction. Here we review some of our recent progress on the signal transduction mediated by water and other polar molecules confined in nanochannels, such as Y-shaped carbon nanotubes. We also explore possible future directions in this emerging field. These studies on molecular signal conduction might have significance in future designs and applications of nanoscale electronic devices, and might also provide useful insights for a better understanding of signal conduction in both physical and biological systems.