In the compartmentalized hypothalamo-neurohypophysial system ( CHNS ), a portion of medial basal hypothalamus (HT) containing the supraoptic nuclei (SON) and the neurohypophysis (PP) were organ-cultured in separate compartments. The intact axonal projections from SON to PP passed through a hole in a fluid-tight barrier which separated the two compartments. When properly sealed, the leak rate from one side to the other is less than 1%/24 h and the only connection between the 2 compartments is axonal. This system had relatively stable basal vasopressin (VP) release rates from both HT and PP for up to 72 h in culture. Basal neurohypophysial VP release rate was unchanged during two successive 1-hour periods on any given day. Physiological responsiveness was confirmed by osmotic challenge. When HT osmolality was changed by +/- 15 mosm, VP release from PP was appropriately and significantly increased or decreased. Equivalent changes in PP side osmolality had no effect on VP release. After 72 h in culture, the VP content of neural lobes from CHNS explants was more than double that of lobes which were severed from HT prior to culture. Finally, the presence of numerous VP neurophysin-containing cells in 72-hour cultured explants was demonstrated by immunocytochemistry. This system will be useful to localize sites of action for agents affecting VP release to either HT and/or PP.