Nephrogenic diabetes insipidus (NDI) is characterized by production of very large quantities of dilute urine due to an inability of the kidney to respond to vasopressin. Congenital NDI results from mutations in the type 2 vasopressin receptor (V2R) in ∼90% of families. These patients do not have mutations in aquaporin-2 (AQP2) or urea transporter UT-A1 (UT-A1). We tested adenosine monophosphate kinase (AMPK) since it is known to phosphorylate another vasopressin-sensitive transporter, NKCC2 (Na-K-2Cl cotransporter). We found AMPK expressed in rat inner medulla (IM). AMPK directly phosphorylated AQP2 and UT-A1 in vitro. Metformin, an AMPK activator, increased phosphorylation of both AQP2 and UT-A1 in rat inner medullary collecting ducts (IMCDs). Metformin increased the apical plasma membrane accumulation of AQP2, but not UT-A1, in rat IM. Metformin increased both osmotic water permeability and urea permeability in perfused rat terminal IMCDs. These findings suggest that metformin increases osmotic water permeability by increasing AQP2 accumulation in the apical plasma membrane but increases urea permeability by activating UT-A1 already present in the membrane. Lastly, metformin increased urine osmolality in mice lacking a V2R, a mouse model of congenital NDI. We conclude that AMPK activation by metformin mimics many of the mechanisms by which vasopressin increases urine-concentrating ability. These findings suggest that metformin may be a novel therapeutic option for congenital NDI due to V2R mutations.