The physiology and structure of capillary endothelial cells in the hypothalamic ventromedial and supraoptic nuclei and pituitary neural lobe were evaluated with quantitative methods and compared. The capillary endothelial cells in the ventromedial nucleus were used as an index of blood-brain barrier endothelium in cerebral gray matter; this endothelium has relatively low surface area and low permeability to tracer solutes. The permeability × surface area product of endothelial cells for a neutral amino acid, <sup>14</sup>C-alpha-aminoisobutyric acid (AIB), in the ventromedial nucleus was similar to the value for supraoptic nucleus and was several hundred times smaller than in the neural lobe. The supraoptic nuclei and neural lobe had exceptionally large capillary surface areas, but dissimilar rates of blood flow and transendothelial influx of AIB. Differences in permeability of the endothelial cells between these two structures correlated closely with their marked dissimilarities in morphology. The neural lobe endothelium had numerous fenestrations (five per capillary cross-section) and vesicular profiles (twice as many as supraoptic nucleus), two features commonly associated with high capillary permeability. The capillary endothelium of the supraoptic nucleus was that of a typical blood-brain barrier structure having intercellular junctions that appeared tight, no fenestrations, and few cytoplasmic pits and vesicles. The unusually large capillary surface area of the supraoptic nucleus and low rate of solute flux across its endothelial cells make this nucleus a unique structure in which rapid changes in tissue volume may occur in response to small perturbations in plasma osmolality. The findings implicate the supraoptic nucleus as an osmotically sensitive detector or ‘osmometer’ in neuroendocrine regulation of body fluid homeostasis.