The ability of the immature kidney to concentrate urine is lower than in adults. This can lead to severe water and electrolyte disorders, especially in premature babies. Resistance to AVP and lower tonicity of the medullary interstitium seem to be the major factors limiting urine concentration in newborns. AVP-stimulated cAMP generation is impaired. This is the result of inhibition of the production by PGE(2) acting through EP3 receptors and increased degradation by phosphodiesterase IV. The expression of aquaporin-2 (AQP2) in the immature kidney is low; however, under conditions of water deprivation and after stimulation with DDAVP, it rises to adult levels. The expression of AQP3 and AQP4 is intact at birth and does not seem to contribute to the hyporesponsiveness to AVP. Low sodium transport by thick ascending loops of Henle, immaturity of the medullary architecture, and adaptations in the transport of urea contribute to the lower tonicity of the medullary interstitium. This paper reviews the alterations in the AVP signal transduction pathway in the immature kidney.