Arginine-vasopressin (AVP) plays a major role in maintaining cardiovascular function and related pathologies. The mechanism involved in its release into the circulation is complex and highly regulated. Recent work has implicated the purinergic receptor, P2X7R, in a role for catecholamine-enhanced AVP release in the rat hypothalamic-neurohypophysial (NH) system. However, the site of P2X7R action in this endocrine system, and whether or not it directly mediates release in secretory neurons have not been determined. We hypothesized that the P2X7R is expressed and mediates AVP release in NH terminals. P2X7R function was first examined by patch-clamp recordings in isolated NH terminals. Results revealed that subpopulations of isolated terminals displayed either high ATP-sensitivity or low ATP-sensitivity, the latter of which was characteristic of the rat P2X7R. Additional recordings showed that terminals showing sensitivity to the P2X7R-selective agonist, BzATP, were further inhibited by P2X7R selective antagonists, AZ10606120 and brilliant blue-G. In confocal micrographs from tissue sections and isolated terminals of the NH P2X7R-immunoreactivity was found to be localized in plasma membranes. Lastly, the role of P2X7R on AVP release was tested. Our results showed that BzATP evoked sustained AVP release in NH terminals, which was inhibited by AZ10606120. Taken together, our data lead us to conclude that the P2X7R is expressed in NH terminals and corroborates its role in AVP secretion.