In the renal collecting duct, water reabsorption is regulated by the antidiuretic hormone vasopressin (AVP). Binding of this hormone to the vasopressin V2 receptor (V2R) leads to insertion of aquaporin-2 (AQP2) water channels in the apical membrane, thereby allowing water reabsorption from the pro-urine to the interstitium. The disorder nephrogenic diabetes insipidus (NDI) is characterized by the kidney's inability to concentrate pro-urine in response to AVP, which is mostly acquired due to electrolyte disturbances or lithium therapy. Alternatively, NDI is inherited in an X-linked or autosomal fashion due to mutations in the genes encoding V2R or AQP2, respectively. This review describes the current knowledge of the cell biological causes of NDI and how these defects may explain the patients' phenotypes. Also, the increased understanding of these cellular defects in NDI has opened exciting initiatives in the development of novel therapies for NDI, which are extensively discussed in this review.