Recent studies have indicated that members of the transient receptor potential vanilloid (TRPV) family of cation channels are required for the generation of normal osmoregulatory responses, yet the mechanism of osmosensory transduction in primary osmoreceptor neurons of the CNS remains to be defined. Indeed, despite ample evidence suggesting that the organum vasculosum lamina terminalis (OVLT) serves as the primary locus of the brain for the detection of osmotic stimuli, evidence that neurons in the OVLT are intrinsically osmosensitive has remained elusive. Here we show that murine OVLT neurons are intrinsically sensitive to increases in the osmolality of the extracellular fluid. Hypertonic conditions provoked increases in membrane cation conductance that resulted in the generation of an inward current, depolarizing osmoreceptor potentials, and enhanced action potential discharge. Moreover, we found that this osmosensory signal transduction cascade was absent in OVLT neurons from TRPV1 knock-out (TRPV1^−/− ) mice and that responses of wild type (WT) OVLT neurons could be blocked by ruthenium red, an inhibitor of TRPV channels. Finally, TRPV1^−/− mice showed significantly attenuated water intake in response to systemic hypertonicity compared with WT controls. These findings indicate that OVLT neurons act as primary osmoreceptors and that a product of the trpv1 gene is required for osmosensory transduction.