Arginine vasopressin (AVP) regulates the osmotic water permeability of the kidney collecting duct by inducing exocytotic insertion of aquaporin-2 into apical membrane. The coupling between AVP-induced intracellular Ca2+ mobilization and apical exocytosis was investigated in isolated perfused rat inner medullary collecting duct (IMCD) segments using confocal fluorescence microscopy. Changes of [Ca2+]i in IMCD cells were measured with fluo-4. A novel confocal imaging technique using a styryl dye, FM1-43, was developed to monitor real-time exocytosis induced by arginine vasopressin. AVP (0.1 nM) triggered a rapid increase of [Ca2+]i in IMCD cells, followed by sustained oscillations. Ratiometric measurement of [Ca2+]i confirmed that the observed [Ca2+]i oscillation was a primary event and was not secondary to changes in cell volume. The frequencies of [Ca2+]i oscillations in each IMCD cell were independent and time variant. 1-Deamino-8-D-arginine vasopressin (a V2 receptor agonist, 0.1 nM) simulated the effects of AVP by triggering [Ca2+]i oscillations. In the absence of extracellular Ca2+, ryanodine (0.1 mM) inhibited AVP-induced Ca2+ mobilization. AVP (0.1 nM) triggered accumulative apical exocytosis in IMCD cells within 20 s after application. Pre-incubating the IMCD with an intracellular Ca2+ chelator, BAPTA, prevented AVP-induced intracellular Ca2+ mobilization, apical exocytosis, and increase of osmotic water permeability. These results indicate that AVP, via the V2 receptor, triggers a calcium signalling cascade observed as [Ca2+]i oscillations in the IMCD and that intracellular Ca2+ mobilization is required for exocytotic insertion of aquaporin-2.