Water intoxication is a serious problem in many patients with chronic psychiatric illness. In an effort to determine the mechanism of this disorder, we investigated the osmoregulation of water intake and antidiuretic function in psychiatric patients with polydipsia and hyponatremia and in matched controls with psychiatric illness but neither polydipsia nor hyponatremia. We found that a water load suppressed plasma osmolality and vasopressin and urine osmolality in both groups, but that urinary dilution and free water clearance were impaired in the patients with hyponatremia, even though plasma levels of vasopressin and solute clearance were similar in the two groups. Moreover, during water loading and infusion of hypertonic saline, the plasma level of vasopressin was higher at any given plasma osmolality in the test patients than in the controls, indicating a downward resetting of the osmostat. Patients' estimates of the amount of water they desired were shown to correlate significantly with the amount of water consumed and, at any given level of plasma osmolality, appeared to be higher in the test patients than in the controls. We conclude that psychiatric patients with polydipsia and hyponatremia have unexplained defects in urinary dilution, the osmoregulation of water intake, and the secretion of vasopressin.