Mutations in the V2 vasopressin receptor (AVPR2) are the most frequent genetic cause of the inherited nephrogenic diabetes insipidus (NDI). About 50% of all missense mutations found in extracellular loops of AVPR2 introduce additional cysteine residues, e.g. R181C, G185C, and Y205C. To explain the loss of receptor function two mechanistic models were suggested: First, the introduction of an additional extracellular Cys residue disrupts the conserved disulfide bond connecting the first and the second extracellular loop. And second, the mutationally introduced Cys residue forms a second disulfide bond with a free Cys residue within the second exoloop. Herein, we took advantage of a new NDI-causing mutation Y205H which affects a codon frequently found to be mutated to Cys in NDI patients. In contrast to Y205C the two mechanisms described above cannot account for the loss of receptor function of Y205H. In-depth functional characterization of mutant AVPR2 showed that also for Y205C the lack of a Tyr residue at position 205 is responsible for the abolished receptor function rather than the formation of a disastrous second disulfide bond. The concerted experimental and phylogenetic analysis emphasizes that Y205 is a key residue in maintaining the structure of AVPR2 and other members of the vasopressin receptor family.