Magnocellular hypothalamic neurons in the rat supraoptic nucleus (SON) normally produce either vasopressin (VP) or oxytocin (OT). Here we demonstrate that many magnocellular neurons in the SON of lactating rats synthesize both hormones at the same time. We show the colocalization of the messenger (m) RNA that encodes the VP precursor with OT-neurophysin; OT mRNA with VP-neurophysin, the C-terminal glycopeptide of the VP precursor, and VP itself, and the presence of both mRNAs in the same cell. At the light microscopic level quantitative studies show that on the second day of lactation, 17% of the SON neurons produce both hormones, on the fifth day 13%, and on the ninth day 9%. Two days after lactation the number of cells that are positive for both hormones returns to the control level (2-3%). We also show by means of electron microscopic immunohistochemistry that both peptides (or their precursors) are present in the same neurosecretory vesicles in nerve endings in the posterior lobe of lactating rats. At the electron microscopic level quantitative studies show that on the second day of lactation 21% of the terminals contain mixed vesicles; this number increases to 24% by the fourth day and is down to 5% by the 15th day, a level similar to that found in control rats. Since the double-labeled cells seemed to be producing additional VP as opposed to OT, we hypothesized that the former should affect urinary osmolality. Urine samples of lactating rats show a significant (5-fold) increase in urine osmolality during lactation (highest on the second day). The increase in osmolality correlated with the increase in the number of VP positive cells during lactation. We suggest that magnocellular neurons that ordinarily synthesize little or no VP can produce this antidiuretic hormone to help the animal compensate for the loss of water associated with lactation.