Free water clearance (CH2O) was measured during hypotonic saline infusion in Sprague-Dawley and in Brattleboro (DI) rats with 131I-induced hypothyroidism and their age-matched controls. At peak urine flow, which was similar in hypothyroid DI (HDI) and control DI (CDI) rats, inulin clearance (CIn/kg) and CH2O/kg were 23 and 20% (P less than 0.02) lower in HDI. Fractional urine flow and fractional sodium excretion were 30 and 40% (P less than 0.001) higher in HDI. Utilization of distal delivery of filtrate for CH2O, formation was 16% less in HDI (P less than 0.01). Papillary osmolality was not higher in HDI rats. Data in Sprague-Dawley rats were similar to those of the DI rats, indicating that endogenous ADH was effectively suppressed. It is concluded: 1) delivery of filtrate out of the proximal tubule was not diminished in hypothyroid rats in spite of a decrease in CIn; 2) despite a similar delivery of filtrate to the distal diluting site, CH2O formation was less in hypothyroid rats than in controls; 3) these data suggest that a defect in the diluting segment could be unmasked at high rates of filtrate delivered to the distal nephron; 4) this defect could be either due to impaired sodium chloride reabsorption or due to increased backdiffusion of water in the distal nephron.