We have previously reported that arginine vasopressin (AVP) stimulates the production of nitric oxide (NO) in inner medullary collecting duct (IMCD) via activation of V2 receptors (V2R) and the mobilization of intracellular Ca²⁺. The aim of this study was to determine the pathway(s) through which this response is mediated. IMCD were dissected from male Sprague-Dawley rats and intracellular Ca²⁺ concentration ([Ca^2+]_i) and NO production measured using a fluorescence imaging system. AVP (100nmol/L) produced a rapid increase [Ca²⁺]_i of 381±78nmol/L that was followed by a significant increase of NO production (166±61%). The specific non-peptide V2R antagonist OPC31260 (1µM), but not the V1R antagonist OPC21268 (1µM), inhibited the increase in [Ca²⁺]_i (up to 91±5%) and abolished the NO response to AVP. Both the phospholipase C (PLC) inhibitor U73112 (3µM) and the inositol (1,4,5) tri-phosphate 3 receptor (IP3R) blocker 2-APB (75µM) reduced the peak [Ca²⁺]_i response to AVP ( by 65±9% and 59±15%, respectively) and abolished the NO response. Although, forskolin (100µM) (an activator of adenylyl-cyclase) elicited a moderate increase in [Ca²⁺]_i, neither pre-incubation with the adenylyl-cyclase inhibitor 2’-5’-dideoxyadenosine (50µM) nor the protein kinase A (PKA) inhibitor PKA_14-22 (100µM) significantly inhibited peak [Ca²⁺]_i in response to AVP. IMCD [Ca²⁺]_i responses to AVP were reduced by 72±8% when incubated in Ca²⁺ free media and could be completely abolished by pre-incubation with the Ca²⁺ATPase inhibitor thapsigargin. We conclude that AVP induced NO production in IMCD is dependent upon V2R activation of the phosphoinositide pathway and the mobilization of Ca²⁺ from both intracellular and extracellular pools.