A midline stereotaxic lesion in rats destroying the periventricular tissue (lamina terminalis and preoptic-anterior hypothalamic periventricular stratum) surrounding the anteroventral third ventricle (AV3V) produces adipsia without other marked behavioral changes. Although food consumption is reduced in animals rendered adipsic by the lesion, feeding continued and intake is comparable to that of water-deprived-sham-lesioned animals. About half the rats recover drinking after a period of adipsia, but the others never resume water intake and become moribund. An analysis of urinary output indicates that adipsic animals fail to reduce urine volume and continue to elaborate an inappropriately dilute urine. The periventricular lesion-induced adipsia without compensating antidiuresis produces a significant rise in plasma protein, sodium, osmolality, and urea nitrogen which if untreated often results in acute encephalopathy leading to death. These data suggest that preoptic-anterior hypothalamic periventricular tissue houses vital neural elements which function in the modulation of water ingestive and conservation mechanisms directed at the maintenance of body fluid homeostasis.