The water channel aquaporin 2 (AQP2) is responsible for water reabsorption by kidney collecting duct cells. A substitution of amino acid leucine 137 to proline in AQP2 (AQP2-L137P) causes Nephrogenic Diabetes Insipidus (NDI). This study aimed to determine the cell biological consequences of this mutation on AQP2 function. Studies were performed in HEK293 and MDCK type I cells, transfected with wildtype (WT) AQP2 or an AQP2-L137P mutant. AQP2-L137P was predominantly detected as a high-mannose form of AQP2, whereas AQP2-WT was observed in both non-glycosylated and complex glycosylated forms. In contrast to AQP2-WT, the AQP2-L137P mutant did not accumulate on the apical plasma membrane following stimulation with forskolin. Ubiquitylation of AQP2-L137P was different from AQP2-WT, with predominance of non-distinct protein bands at various molecular weights. The AQP2-L137P mutant displayed reduced half-life compared to AQP2-WT. Treatment of cells with chloroquine increased abundance of AQP2-WT, but not AQP2-L137P. In contrast, treatment with MG132 increased abundance of AQP2-L137P but not AQP2-WT. Xenopus oocytes injected with AQP2-WT had increased osmotic water permeability when compared to AQP2-L137P, which correlated with lack of the mutant form in the plasma membrane. From the localization of the mutation and nature of the substitution it is likely that AQP2-L137P causes protein misfolding, which may be responsible for the observed functional defects. The data suggest that the L137P mutation results in altered AQP2 protein maturation, increased AQP2 degradation via the proteasomal pathway and limited plasma membrane expression. These combined mechanisms are likely responsible for the phenotype observed in this class of NDI patients.