Dilutional hyponatremia is a commonly observed disorder in hospitalized patients. It represents an excess of water in relation to prevailing sodium stores and is most often associated with a high plasma level of arginine vasopressin, including that found in patients with the syndrome of inappropriate antidiuretic hormone secretion. Hyponatremia may be classified as either acute or chronic depending on the rate of decline of serum sodium concentration, and can lead to a wide range of deleterious changes involving almost all body systems. Serious complications of dilutional hyponatremia most frequently involve the central nervous system. In fact, acute severe hyponatremia is potentially life-threatening and must be treated promptly and aggressively. Chronic hyponatremia often develops in patients with nonrenal diseases and is associated with increased morbidity and mortality. In patients hospitalized for congestive heart failure, hyponatremia is linked to a poor prognosis and increased length of hospital stay. Prompt recognition and optimal management of hyponatremia in hospitalized patients may reduce in-hospital mortality and symptom severity, allow for less intensive hospital care, decrease the duration of hospitalization and associated costs, and improve the treatment of underlying comorbid conditions and patients' quality of life. The proper treatment of dilutional hyponatremia, especially when chronic, must avoid increasing serum sodium too rapidly, which can lead to permanent or fatal neurologic sequelae. The treatment of hyponatremia may be facilitated by emerging therapies that block the actions of arginine vasopressin at V2 and V1a receptors to promote aquaresis, the electrolyte-sparing elimination of free water, and elevate serum sodium concentrations.