The primary cilium of renal epithelial cells is a non-motile sensory organelle, implicated in mechanosensory transduction signals. Recent studies from our laboratory indicate that renal epithelial primary cilia display abundant channel activity, however, the presence and functional role of specific membrane receptors in this organelle is heretofore unknown. Here, we determined a functional signaling pathway associated with, the type-2 vasopressin receptor (V2R) in primary cilia of renal epithelial cells. Besides their normal localization on basolateral membrane, V2R was expressed in primary cilia of LLCPK1 renal epithelial cells. The presence of V2R in primary cilia was determined by spontaneous fluorescence of a V2R-gfp chimera, and confirmed by immunocytochemical analysis of wild type LLC-PK1 cells stained with anti-V2R antibodies and, in LLC-PK1 cells overexpressing the V2R-Flag, with anti-Flag antibody. Ciliary V2R co-localized with adenylyl cyclase (AC) type V/VI in all cell types tested. Functional coupling of the receptors with AC was confirmed by measurement of cAMP production in isolated cilia, and by testing AVP-induced cation-selective channel activity either in reconstituted lipid bilayers or subjected to membrane-attached patch clamping. Addition of either 10 µM AVP (trans) or forskolin (cis) in the presence but not the absence of ATP (1 mM, cis) stimulated cation-selective channel activity in ciliary membranes. This channel activity was reduced by addition of the PKA inhibitor, PKI. The data provide the first demonstration for the presence of V2R in primary cilia of renal epithelial cells, and a functional cAMP-signaling pathway, which targets ciliary channel function, and may help control the sensory function of the primary cilium.