We have developed a transgenic system that, for the first time, facilitates the monitoring of the regulatory dynamics of a central peptidergic system from transcription of a neuropeptide gene to the storage and release of the mature secretory product. Here we describe novel studies on the regulation of this system by physiological stimuli. The rat hypothalamic vasopressin (VP) mRNA responds in two ways to the functional demand imposed by an osmotic challenge. Firstly, the abundance of the VP RNA increases, and secondly, the size of the VP transcript increases as a consequence of a lengthening of the poly(A) tail. We have previously shown that chronic ingestion of 6-n-propyl-2-thiouracil (PTU), while not affecting plasma osmolality or VP mRNA size, results in a significant increase in the abundance of the hypothalamic VP mRNA. We now show that chronic PTU ingestion results in a dramatic increase in the abundance of the mRNA encoded by a modified rat vasopressin transgene that is expressed in rat vasopressinergic magnocellular neurons. This is accompanied by a significant depletion in neural lobe stores of a VP. However, this increase in transgene expression is accompanied by an increase in the proportion of transgene encoded products reaching the neural lobe--the pituitary content of a unique peptide encoded by the modified transgene does not change. These observations are further evidence in support of models of neurohypophyseal homeostasis that suggest that pituitary VP peptide levels passively reflect changes in hormone release and synthesis and that the availability of mRNA is the primary determinant of pituitary VP content in the basal state.