Electrolytic destruction of the pituitary stalk in rats markedly affected their water metabolism and induced ultrastructural changes in the posterior pituitary. The urinary output increased for 1-2 days after surgery. Subsequently polyuria and polydipsia temporarily decreased and vasopressin excretion with the urine increased. This oliguric interphase was followed by permanent polyuria and polydipsia. No ultrastructural changes were apparent for a few hours after surgery, but 3-5 days later the number of electron-dense granules of the axons decreased and conglomerated in the form of multilamellar bodies. Phagocytic and excretory phenomena were observed in the cytoplasm of endothelial cells and pericytes. The nuclei of pituicytes became loosened, and 5 days following surgery the mitochondria showed swelling and ruptures. The Golgi apparatus and the RER were prominent at 14 days, while degenerative lipid droplets accumulated in the cytoplasm. The fine structural findings, in agreement with the functional observations, support the assumption that the oliguric interphase is due to excessive discharge of vasopressin from the degenerating neural lobe of the pituitary.