Toad bladder epithelial cells were homogenized and fractionated by Percoll density‐gradient centrifugation. Binding of tritium‐labeled vasopressin ([3H]AVP) was measured in surface membranes (SM), microsomes (M), and a 100,000g(60‐min) micrsomal supernatant fraction (S). More than two‐thirds of the total receptors were in S. Receptors in SM — but not in S — were tightly coupled to G‐protein as suggested by inhibition of [3H]AVP binding by GTP. GTP‐sensitivity of [3H]AVP binding was not altered by vasotocin (AVT) stimulation, although the distribution of receptors shifted from SM to S.Intact bladders, exposed on the serosal side to 1‐desamino, 7‐lysine‐(4‐azidobenzoyl), 8‐arginine vasotocin (d7‐N3‐AVT) in the presence of UV light, exhibited a persistent hydroosmotic response compared to controls stimulated with photoaffinity analog in the dark. Cell fractions from the irradiated bladders showed a reduction in [3H]AVP binding in SM and S.Intact bladders, exposed on the mucosal side to d7‐N3‐AVT in the presence of UV light (while stimulated from the serosal side with AVP) exhibited a decrease in [3H]AVP binding in SM compared to controls without d7‐N3‐AVT.These findings suggest the following working hypothesis for the hydroosmotic action of vasopressin: (1) Vasopressin binds to receptors at the basolateral membrane, which is water‐permeable in the unstimulated state; (2) The hormone‐receptor complex is endocytosed and, together with other components of the basolateral membrane containing “water channels”, appears in “light vesicles”; (3) These light vesicles (and/or similar vesicles in a cytoplasmic reservoir) move to the apical membrane where they fuse with the water‐impermeable apical membrane and thereby