Arginine vasopressin (AVP) is a neurohypophysial hormone synthesized as a part of a prepropeptide precursor containing the signal peptide, AVP hormone, AVP-associated neurophysin II and copeptin in the hypothalamic neurosecretory neurons. A transgenic (Tg) rat line expressing the AVP-eGFP fusion gene has been generated. To establish the AVP-eGFP Tg rat as a unique model for an analysis of AVP dynamics in vivo, we first examined the in vivo molecular dynamics of the AVP-eGFP fusion gene, and then the release of GFP in response to physiological stimuli. Double immunoelectron microscopy demonstrated that GFP was specifically localized in neurosecretory vesicles of AVP neurons in this Tg rat. After stimulation of the posterior pituitary with high potassium we demonstrated the exocytosis of AVP neurosecretory vesicles containing GFP at the ultrastructural level. Biochemical analyses indicated that the AVP-eGFP fusion gene is subjected to in vivo post-translational modifications like the native AVP gene, and is packaged into neurosecretory vesicles as a fusion protein: copeptin 1-14 -GFP. Moreover, GFP release into the circulating blood appeared to be augmented after osmotic stimulation, like native AVP. Thus, here we show for the first time the in vivo molecular processing of the AVP-eGFP fusion gene and stimulated secretion after osmotic stimulation in rats. Because GFP behaved like native AVP in the hypothalamopituitary axis, and in particular was released into the circulation in response to a physiological stimulus, the AVP-eGFP Tg rat model appears to be a powerful tool for analyzing neuroendocrine systems at the organismal level.