In mammals, the hormonal regulation of water homeostasis is mediated by the aquaporin-2 water channel (Aqp2) of the collecting duct (CD). Vasopressin induces redistribution of Aqp2 from intracellular vesicles to the apical membrane of CD principal cells, accompanied by increased water permeability. Mutations of AQP2 gene in humans cause both recessive and dominant nephrogenic diabetes insipidus (NDI), a disease in which the kidney is unable to concentrate urine in response to vasopressin. In this study, we generated a line of mice with the distal COOH-terminal tail of the Aqp2 deleted (Aqp2^Δ230), including the protein kinase A phosphorylation site (S256), but still retaining the putative apical localization signal (221–229) at the COOH-terminal. Mice heterozygous for the truncation appear normal. Homozygotes are viable to adulthood, with reduced urine concentrating capacity, increased urine output, decreased urine osmolality, and increased daily water consumption. Desmopressin increased urine osmolality in wild-type mice but had no effect on Aqp2^Δ230/Δ230 mice. Kidneys from affected mice showed CD and pelvis dilatation and papillary atrophy. By immunohistochemical and immunoblot analyses using antibody against the NH₂-terminal region of the protein Aqp2^Δ230/Δ230 mice had a markedly reduced protein abundance. Expression of the truncated protein in MDCK cells was consistent with a small amount of functional expression but no stimulation. Thus we have generated a mouse model of NDI that may be useful in studying the physiology and potential therapy of this disease.