Lithium (Li)-induced nephrogenic diabetes insipidus (NDI) has been attributed to the increased production of renal prostaglandin E2 (PGE2). Previously we reported that extacellular nucleotides (ATP/UTP), acting through P2Y2 receptor in rat medullary collecting duct (mCD) produce and release PGE2. Hence we hypothesized that increased production of PGE2 in Li-induced NDI may be mediated by enhanced puringeric signaling in the mCD. Sprague-Dawley rats were fed either control or Li-added diet for 14 or 21 days. Li feeding resulted in marked polyuria and polydipsia associated with decrease in AQP2 protein abundance in inner medulla (~20% of controls), and a 2-fold increase in urinary PGE2. When acutely challenged ex vivo with ATPS, UTP or ADP, mCD of Li-fed rats showed significantly higher increases (50 to 130% over control diet fed rats) in PGE2 production, indicating that more than one subtype of P2Y receptor is involved. This was associated with a 3.4-fold increase in P2Y4, but not P2Y2 receptor mRNA expression in the inner medulla of Li-fed rats as compared to control diet-fed rats. Confocal laser immunoflouorescence microscopy revealed predominant localization of both P2Y2 and P2Y4 receptors in the mCD of control or Li diet-fed rats. Taken together, these data indicate that in Li-induced NDI: (i) purinergic signaling in the mCD is sensitized with increased production of PGE2; and (ii) P2Y2 and/or P2Y4 receptors may be involved in the enhanced purinergic signaling. Our study also reveals the potential beneficial effects of P2Y receptor antagonists in the treatment and/or prevention of Li-induced NDI.