Arginine vasopressin (AVP) is an antidiuretic hormone synthesized principally in the hypothalamic supraoptic and paraventricular nuclei. The immunoglobulin heavy chain binding protein (BiP), one of the most abundant endoplasmic reticulum (ER) chaperones, is highly expressed in AVP neurons, even under basal conditions. Moreover, its expression is upregulated in proportion to the increase in AVP expression under dehydration. These data suggest that AVP neurons are constantly exposed to ER stress. BiP knockdown in AVP neurons induces ER stress and autophagy, resulting in AVP neuronal loss, indicating that BiP is pivotal in maintaining the AVP neuron system. Furthermore, inhibition of autophagy after BiP knockdown exacerbates AVP neuronal loss, suggesting that autophagy induced under ER stress is a protective cellular mechanism by which AVP neurons cope with ER stress. Familial neurohypophysial diabetes insipidus (FNDI) is an autosomal dominant disorder caused by mutations in the AVP gene. It is characterized by delayed-onset progressive polyuria and eventual AVP neuronal loss. In AVP neurons of FNDI model mice, mutant protein aggregates are confined to a specific compartment of the ER, called the ER-associated compartment (ERAC). The formation of ERACs contributes to maintaining the function of the remaining intact ER, and mutant protein aggregates in ERACs undergo autophagic-lysosomal degradation without isolation or translocation from the ER, representing a novel protein degradation system in the ER.