The brain peptides vasopressin and oxytocin play crucial roles in the regulation of salt and water balance. The genes encoding these neurohormones are regulated by cell-specific and physiological cues, but the molecular mechanisms remain obscure. New strategies, involving the introduction of rat transgenes into rats, are being used to address these issues, but the complexity of the rat genome has hampered progress. By contrast, the pufferfish, Fugu rubripes, has a "junk-free" genome. The oxytocin homologue from Fugu, isotocin, has been introduced into rats and is expressed in oxytocin neurons, where it is upregulated by physiological perturbations that upregulate the oxytocin gene. The Fugu and rat lineages separated 400 million years ago, yet the mechanisms that regulate the isotocin and oxytocin genes have been conserved. Fugu genome analysis and transgenesis in the physiologically tractable rat host are a powerful combination that will enable the identification of fundamental components of the neural systems that control homeostasis.