Osmotic regulation of supraoptic nucleus (SON) neuron activity depends in part on activation of neuronal glycine receptors (GlyRs), most probably by taurine released from adjacent astrocytes. In the neurohypophysis in which the axons of SON neurons terminate, taurine is also concentrated in and osmo-dependently released by pituicytes, the specialized glial cells ensheathing nerve terminals. We now show that taurine release from isolated neurohypophyses is enhanced by hypo-osmotic and decreased by hyper-osmotic stimulation. The high osmosensitivity is shown by the significant increase on only 3.3% reduction in osmolarity. Inhibition of taurine release by 5-nitro-2-(3-phenylpropylamino)benzoic acid, niflumic acid, and 4,4'-diisothiocyanatostilbene-2,2'-disulfonic acid suggests the involvement of volume-sensitive anion channels. On purified neurohypophysial nerve endings, activation of strychnine-sensitive GlyRs by taurine or glycine primarily inhibits the high K(+)-induced rise in [Ca(2+)](i) and subsequent release of vasopressin. Expression of GlyRs in vasopressin and oxytocin terminals is confirmed by immunohistochemistry. Their implication in the osmoregulation of neurohormone secretion was assessed on isolated whole neurohypophyses. A 6.6% hypo-osmotic stimulus reduces by half the depolarization-evoked vasopressin secretion, an inhibition totally prevented by strychnine. Most importantly, depletion of taurine by a taurine transport inhibitor also abolishes the osmo-dependent inhibition of vasopressin release. Therefore, in the neurohypophysis, an osmoregulatory system involving pituicytes, taurine, and GlyRs is operating to control Ca(2+) influx in and neurohormone release from nerve terminals. This elucidates the functional role of glial taurine in the neurohypophysis, reveals the expression of GlyRs on axon terminals, and further defines the role of glial cells in the regulation of neuroendocrine function.