To maintain water homeostasis, vasopressin (AVP), released from the pituitary, binds its vasopressin type-2 receptor (V2R) in renal collecting duct cells, and induces translocation of Aquaporin-2 (AQP2) water channels from vesicles into the apical membrane, resulting in urine concentration. In congenital Nephrogenic Diabetes Insipidus (NDI), the kidney fails to concentrate urine in response to AVP, which is mostly due to mutations in the V2R gene. Missense V2R mutants in NDI are retained in the endoplasmic reticulum (ER), due to misfolding. As they are often functional, their ER retention is fundamental to the disease. V2R is thought to function only when expressed in the plasma membrane. To work toward treatment, we showed that cell permeable V2R and V1bR antagonists (CPAn) rescued the basolateral cell surface expression of ER-retained V2R mutants in NDI in polarized cells. In vivo studies with V1bR antagonists revealed a significant normalization of the daily urine output and osmolality in patients, indicating that CPAn are promising pharmacological therapeutics to treat congenital NDI. Interestingly, the pharmaceutical industry developed non-peptide V2R agonists, meant to treat incontinence via oral administration. As these drugs thus have to pass the intestinal cell layer, we reasoned they must be cell membrane permeable. Indeed, treatment of cells with cell-permeable V2R agonist (CPAs), but not peptidic dDAVP, induced generation of cAMP from ER-retained V2R mutants in NDI and restored translocation of AQP2 to the apical membrane. Surprisingly, however, this effect was obtained without changing the intracellular localization or stability of the V2R mutants, which revealed that the V2R mutants can be activated inside the cell. As such, our data revealed a novel concept that GPCRs can be activated intracellularly and that CPAs are highly-promising novel therapeutics to treat diseases due to misfolded GPCRs in general, and NDI due to V2R mutations in particular.