One of the earliest requirements for the formation of a solid tumor is the establishment of an adequate blood supply. Clear cell renal cell carcinomas (ccRCC) are highly vascularized tumors in which the earliest genetic event is most commonly the biallelic inactivation of the VHL tumor suppressor gene, leading to constitutive activation of the HIF-1α and HIF-2α transcription factors, which are known angiogenic factors. However it remains unclear whether either or both HIF-1α or HIF-2α stabilization in normal renal epithelial cells are necessary or sufficient for alterations in blood vessel formation. We show that renal epithelium-specific deletion of Vhl in mice causes increased medullary vascularization and that this phenotype is completely rescued by Hif1a co-deletion, but not by co-deletion of Hif2a. A physiological consequence of changes in the blood vessels of the vasa recta in Vhl-deficient mice is a diabetes insipidus phenotype of excretion of large amounts of highly diluted urine. This constitutive diuresis is fully compensated by increased water consumption and mice do not show any signs of dehydration, renal failure or salt wasting and blood electrolyte levels remain unchanged. Co-deletion of Hif1a, but not Hif2a, with Vhl, fully restored kidney morphology and function, correlating with the rescue of the vasculature. We hypothesize that the increased medullary vasculature alters salt uptake from the renal interstitium, resulting in a disruption of the osmotic gradient and impaired urinary concentration. Taken together, our study characterizes a new mouse model for a form of diabetes insipidus and non-obstructive hydronephrosis and provides new insights into the physiological and pathophysiological effects of HIF-1α stabilization on the vasculature in the kidney.