It has been the general consensus that cAMP-mediated PKA-dependent phosphorylation of aquaporin-2 is the primary mechanism of vasopressin to regulate osmotic water permeability in kidney collecting duct. By using laser scanning confocal microscopy to monitor [Ca2+]i and apical exocytosis in individual cells of inner medullary collecting duct, we have demonstrated that vasopressin also triggers intracellular Ca2+ mobilization, which is coupled to apical exocytotic insertion of aquaporin-2. Vasopressin-induced Ca2+ mobilization is in the form of oscillations, which involves both intracellular Ca2+ release from ryanodine-gated Ca2+ stores and extracellular Ca2+ influx via capacitative calcium entry. Each individual cell operates as an independent calcium oscillator with time variance in frequency and amplitude. Vasopressin-induced Ca2+ mobilization is mediated by cAMP, but is independent of PKA. Exogenous cAMP analog (8-pCPT-2'-O-Me-cAMP), which activates Epac (exchange protein directly activated by cAMP), but not PKA, triggers Ca2+ mobilization and apical exocytosis. These observations suggest that activation of Epac by cAMP may also contribute to the action of vasopressin in regulating osmotic water permeability. There are multiple plausible candidates for downstream effectors of vasopressin-induced Ca2+ signal including calmodulin, myosin light chain kinase, calmodulin kinase II, and calcineurin. All of them have been implicated in the regulation of aquaporin-2 trafficking and/or water permeability.