Hyponatremia is a common and potentially serious electrolyte disorder, most often caused by excessive arginine vasopressin (AVP) secretion. Conventional management of hyponatremia is based on graded steps starting from water restriction in mild cases to administration of saline in symptomatic cases, which may not be effective. A major new approach in the treatment of hyponatremia is the development of AVP receptor antagonists that directly inhibit the effect of increased AVP which results in the excretion of electrolyte free water. This review summarizes pathophysiology, conventional treatment and future directions in the treatment of hyponatremia.