Inositol Inpp5k (or Pps, SKIP) is a member of the inositol polyphosphate 5-phosphatases family with a poorly characterized function in vivo. In this study, we explored the function of this inositol 5-phosphatase in mice and cells overexpressing the 42-kDa mouse Inpp5k protein. Inpp5k transgenic mice present defects in water metabolism characterized by a reduced plasma osmolality at baseline, a delayed urinary water excretion following a water load, and an increased acute response to vasopressin. These defects are associated with the expression of the Inpp5k transgene in renal collecting ducts and with alterations in the arginine vasopressin/aquaporin-2 signalling pathway in this tubular segment. Analysis in a mouse collecting duct mCCD cell line revealed that Inpp5k overexpression leads to increased expression of the arginine vasopressin receptor type 2 and increased cAMP response to arginine vasopressin, providing a basis for increased aquaporin-2 expression and plasma membrane localization with increased osmotically induced water transport. Altogether, our results indicate that Inpp5k 5-phosphatase is important for the control of the arginine vasopressin/aquaporin-2 signalling pathway and water transport in kidney collecting ducts.