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In response to an osmotic challenge, the synthesis of the antidiuretic hormone arginine vasopressin (AVP) increases in the hypothalamus, and this is accompanied by extension of the 3′ poly(A) tail of the AVP mRNA, and the up-regulation of the expression of RNA binding protein Caprin-2. Here we show that Caprin-2 binds to AVP mRNAs, and that lentiviral mediated shRNA knockdown of Caprin-2 in the osmotically stimulated hypothalamus shortens the AVP mRNA poly(A) tail at the same time as reducing transcript abundance. In a recapitulated in vitro system, we confirm that Caprin-2 over-expression enhances AVP mRNA abundance and poly(A) tail length. Importantly, we show that Caprin-2 knockdown in the hypothalamus decreases urine output and fluid intake, and increases urine osmolality, urine sodium concentration, and plasma AVP levels. Thus Caprin-2 controls physiological mechanisms that are essential for the body's response to osmotic stress.