The hypothalamic region, dissected from normal rat embryos, was transplanted into the IVth ventricle of newborn mutant Brattleboro rats. Water intake and urine osmolality were measured in both the recipient animals and unoperated littermate controls during a 7-week period following weaning. No differences were found between operated and unoperated animals. Ten weeks after transplantation, host animals were fixation perfused and the brains prepared for either catecholamine fluorescence or vasopressin immunohistochemistry. Well-developed grafts were found in the IVth ventricle of the hosts. They received innervation from the host locus coeruleus and contained many neurons with vasopressin-like immunoreactivity. Vasopressin-containing fibers were found running from the grafts into the host medulla.