Vasopressin (antidiuretic hormone) regulates body water balance by controlling water permeability of the renal collecting ducts. The control mechanisms may involve alterations in the number or unit conductance of water channels in the apical plasma membrane of collecting-duct cells. How this occurs is unknown, but indirect evidence exists for the "shuttle" hypothesis, which states that vasopressin causes exocytic insertion of water channel-laden vesicles from the apical cytosol. To test key aspects of the shuttle hypothesis, we have prepared polyclonal antisera against the recently cloned collecting-duct water channel protein and used the antisera in immunolocalization studies (light and electron microscopic levels) in thin and ultrathin cryosections from rat kidney. Labeling was seen exclusively in collecting-duct principal cells and inner medullary collecting-duct cells. Apical membrane labeling was intense. There was heavy labeling of abundant small subapical vesicles and of membrane structures within multivesicular bodies. In addition, labeling of basolateral plasma membranes in inner medullary collecting ducts was present. Depriving rats of water for 24 or 48 hr markedly increased collecting-duct water-channel protein expression determined by immunoblotting and immunolabeling. These results are compatible with at least two complementary modes of water-channel regulation in collecting-duct cells: (i) control of channel distribution between the apical membrane and a reservoir in subapical vesicles (shuttle hypothesis) and (ii) regulation of the absolute level of expression of water-channel protein.