Polydipsia and water intoxication cause considerable morbidity and mortality in chronic psychiatric patients. The pathophysiology of the disorder is unknown, and there is no effective treatment. Angiotensin II is an important dipsogen in animals; in humans, some conditions with abnormal thirst are associated with increased angiotensin function. Chronic D2 dopamine receptor blockade increases angiotensin II-induced thirst in animals; in humans, increased peripheral response to angiotensin II is documented. Chronic D2 blockade with typical neuroleptics may increase sensitivity to angiotensin II and induce thirst. Clozapine, which has negligible D2 blocking action may improve polydipsia. Recent case reports demonstrate improvement of polydipsia during clozapine therapy. Angiotensin II releases vasopressin; this could explain water intoxication, which occurs later in the syndrome. This paper suggests an etiological model and a treatment modality for this disorder.