Drug-induced hyponatremia caused by renal water retention is mainly due to syndrome of inappropriate antidiuresis (SIAD). SIAD can be grouped into syndrome of inappropriate antidiuretic hormone secretion (SIADH) and nephrogenic syndrome of inappropriate antidiuresis (NSIAD). The former is characterized by uncontrolled hypersecretion of arginine vasopressin (AVP), and the latter is produced by intrarenal activation for water reabsorption and characterized by suppressed plasma AVP levels. Desmopressin is useful for the treatment of diabetes insipidus because of its selective binding to vasopressin V2 receptor (V2R), but it can induce hyponatremia when prescribed for nocturnal polyuria in older patients. Oxytocin also acts as a V2R agonist and can produce hyponatremia when used to induce labor or abortion. In current clinical practice, psychotropic agents, anticancer chemotherapeutic agents, and thiazide diuretics are the major causes of drug-induced hyponatremia. Among these, vincristine and ifosfamide were associated with sustained plasma AVP levels and are thought to cause SIADH. However, others including antipsychotics, antidepressants, anticonvulsants, cyclophosphamide, and thiazide diuretics may induce hyponatremia by intrarenal mechanisms for aquaporin-2 (AQP2) upregulation, compatible with NSIAD. In these cases, plasma AVP levels are suppressed by negative feedback. In rat inner medullary collecting duct cells, haloperidol, sertraline, carbamazepine, and cyclophosphamide upregulated V2R mRNA and increased cAMP production in the absence of vasopressin. The resultant AQP2 upregulation was blocked by a V2R antagonist tolvaptan or protein kinase A (PKA) inhibitors, suggestive of the activation of V2R-cAMP-PKA signaling. Hydrochlorothiazide can also upregulate AQP2 in the collecting duct without vasopressin, either directly or via the prostaglandin E2 pathway. In brief, nephrogenic antidiuresis, or NSIAD, is the major mechanism for drug-induced hyponatremia. The associations between pharmacogenetic variants and drug-induced hyponatremia is an area of ongoing research.