Neuronal process outgrowth has been postulated to be one of the fundamental steps involved in neuronal development. To test whether vasopressin can influence neuronal development by acting on the outgrowth of neuronal processes, we determined the neurotrophic action of the memory-enhancing peptide, vasopressin, in neurons derived from the cerebral cortex, a site of integrative cognitive function and long-term memory. Exposure to V(1) receptor agonist significantly increased multiple features of nerve cell morphology, including neurite length, number of branches, branch length, number of branch bifurcation points and number of microspikes. The dose-response profile of V(1) receptor agonist-induced neurotrophism exhibited a biphasic function, with lower concentrations inducing a significant increase while higher concentrations generally induced no significant effect. The neurotrophic effect of V(1) receptor activation did not require growth factors present in serum. Analysis of the regional selectivity of the vasopressin-induced neurotrophic effect revealed significant V(1) receptor agonist-induced neurotrophism in occipital and parietal neurons, whereas frontal and temporal neurons were unresponsive. Results of experiments to determine the mechanism of vasopressin-induced neurotrophism demonstrated that vasopressin-induced neurotrophism is dependent on V(1)a receptor activation, requires L-type calcium channel activation and activation of both pathways of the phosphatidylinositol signaling cascade, inositol trisphosphate and protein kinase C. These studies are the first to describe a functional cellular response for vasopressin in the cerebral cortex. The findings are discussed with respect to their implications for understanding the role of vasopressin-induced neurotrophism, the associated signaling pathways required for this response, and the ability of vasopressin to enhance memory function.