The mechanism by which chlorpropamide (CP) treatment promotes antidiuresis is unknown. CP competitively inhibited antidiuretic hormone (ADH) binding and adenylyl cyclase (AC) stimulation (inhibition constants K_i and K'_i of 2.8 mM and 250 µM, respectively) in the LLC-PK₁ cell line. CP (333 µM) increased the apparent K_a of ADH for AC activation (0.31 vs. 0.08 nM) without affecting a maximal response, suggesting competitive antagonism. Because CP lowers "basal" AC activity and the AC activation-ADH receptor occupancy relationship (A-O plots), it is an ADH inverse agonist. Twenty-four-hour CP exposure (100 µM) upregulated the ADH receptors without affecting affinity. This lowered K_a and increased basal AC activity and maximal response (1.86 vs. 1.35 and 14.9 vs. 10.6 fmol cAMP · min¹ · 10³ cells¹, n = 6, P < 0.05). NaCl, which potentiates ADH stimulation, also increased basal AC activity. This, together with the CP-ADH inverse agonism and increased basal AC activity at higher receptor density, unmasks constitutive receptor signaling. The CP-ADH inverse agonism explains receptor upregulation and predicts the need for residual ADH with functional isoreceptors for CP-mediated antidiuresis. This could be why CP ameliorates partial central diabetes insipidus but not nephrogenic diabetes insipidus.