The peptide angiotensin-(1-7) [Ang-(1-7)] is known to enhance water transport in rat inner medullary collecting duct (IMCD). The aim of this study was to determine the mechanism of the Ang-(1-7) effect on osmotic water permeability (Pf). Pf was measured in the normal rat IMCD perfused in vitro in presence of agonists [Ang-(1-7), arginine vasopressin (AVP) and Ang-(3-8)], and antagonists of the angiotensin and the vasopressin cascade. Ang-(1-7), but not Ang-(3-8), increased Pf significantly. The effect of Ang-(1-7) on Pf was abolished by its selective antagonist, A-779, added before or after Ang-(1-7). Prostaglandin E2 and the protein kinase A inhibitor H8 also blocked the Ang-(1-7) effect. Blockade of vasopressin V1 receptors by antagonists did not change the Ang-(1-7) effect, but pre-treatment with a V2 antagonist abolished the effect of Ang-(1-7) on Pf. Similarly, pre-treatment with A-779 inhibited AVP's effect on Pf. Forskolin-stimulated Pf was blocked both by A-779 and by the V2 antagonist. Finally, Ang-(1-7) increased cAMP levels in fresh IMCD cell suspensions whilst the forskolin-stimulated cAMP synthesis was decreased by A-779 and the V2 antagonist. These data provide evidence that Ang-(1-7) interacts via its receptor with the AVP V2 system through a mechanism involving adenylate-cyclase activation.