Aquaporin-2 (AQP-2) is a vasopressin-regulated water channel in the kidney collecting duct. AQP-2 is selectively permeable to water molecule and is translocated between the apical membrane and subapical endosomes in response to vasopressin. To investigate the localization and structure of the aqueous pathway of the AQP-2 water channel, a series of site-directed mutants was constructed and functionally analyzed. Insertion of N-glycosylation reporter sequence into each hydrophilic loop (HL) indicated that AQP-2 has a six-membrane spanning topology and that insertional mutations in HL-2 or HL-5 do not alter water channel function. Mercury-sensitive site of AQP-2 is located near the second asparagine-proline-alanine (NPA) domain at cysteine 181, but not near the first NPA domain. Replacement of HL-3 or HL-4 with the corresponding part of Escherichia coli glycerol facilitator abolished water channel function without changing plasma membrane expression of the channel protein. Introduction of cysteine residues in His-122, Asn-123, Gly-154, Asp-155, or Asn-156 induced partial mercury sensitivity, and point mutations in asparagine 123 significantly altered water permeability. Our results implicate that the structure of AQP-2 is different from models previously proposed for AQP-1 and that HL-3 and HL-4 are closely located to the aqueous pathway.