Both individual cells and organs regulate their volume in response to sustained hypo-osmolality via solute and water losses. Similar processes occur in the whole body to regulate the volumes of extracellular fluid (ECF) and intravascular spaces toward normal levels. Body water losses occur via the phenomena “escape from antidiuresis”; solute losses occur through the secondary natriuresis induced by water retention. As a result of resistance to arginine vasopressin (AVP) signaling, escape from antidiuresis is caused by downregulation of kidney aquaporin-2 expression despite high AVP plasma levels. Recent data have implicated downregulation of vasopressin V₂R as a potential mechanism of resistance, and suggest that this may be a result of decreased intrarenal angiotensin II signaling in combination with increased intrarenal nitric oxide and prostaglandin E₂ signaling. The natriuresis that results in volume regulation of the ECF and vascular spaces is the result of intrarenal hemodynamic changes produced by volume expansion, but the degree to which these effects are modulated by aldosterone secretion and the activity of distal sodium cotransporters and channels remains to be elucidated. The clinical implication of these volume-regulatory processes is that the chronic hyponatremic state is one of water retention and solute losses from intracellular fluid and ECF compartments. The degree to which solute losses versus water retention contribute to hyponatremia will vary in association with many factors, including the etiology of the hyponatremia, the rapidity of development of the hyponatremia, the chronicity of the hyponatremia, the volume of daily water loading, and individual variability. Understanding these volume-regulatory processes allows a better understanding of many aspects of the conundrum of patients with “clinical euvolemia” and dilutional hyponatremia from AVP-induced water retention.