In sheep, arginine vasopressin (AVP) appears to be a more potent ACTH-releasing factor than ovine corticotrophin-releasing hormone. In order to investigate the neuroendocrine regulation of AVP secretion we have developed a novel system for maintaining fetal ovine hypothalamic neurones in serum-free culture. Hypothalamic neurones derived from fetal sheep at day 70 gestation (term = 145 days) secreted AVP under basal conditions and in response to repeated potassium-induced depolarizations, for up to 35 days in vitro. AVP secretion was time- and calcium-dependent. AVP secreted from ovine hypothalamic cells co-eluted with synthetic AVP on a Sephadex chromatography column and diluted in parallel with AVP standard in the radioimmunoassay. The addition of coritisol (150ΠM) to medium bathing ovine hypothalamic cells significantly inhibited basal, and potassium-induced AVP secretion without altering the AVP content of the cell cultures. Furthermore, the opioid peptide [D-Pro10]Dynorphin(1–11) which acts via the ĸ opioid receptor, significantly inhibited basal and potassium-stimulated AVP secretion, an effect which was abolished when cells were cultured in the presence of cortisol. These data show that hypothalamic AVP is a site for negative feedback regulation within the ovine hypothalamic-pituitary-adrenal axis. Furthermore, these data suggest that the ĸ opioid system inhibits AVP secretion from ovine hypothalamic neurones, a response which is modulated by glucocorticoids.