Tolvaptan is an arginine vasopressin (AVP) antagonist that acts to increase excretion of free water (aquaresis) in patients without introducing electrolyte abnormalities or worsening renal function. It works via blockade of vasopressin-2 receptors at the renal collecting duct. Since the approval of tolvaptan for the treatment of hypervolemic and euvolemic hyponatremia in 2009, new studies have been reported to better characterize its pharmacokinetic and pharmacodynamic profile of tolvaptan. This paper is a review of both these clinical studies, as well as previous literature, in order to help guide appropriate clinical use of tolvaptan in patients. With appropriate monitoring of serum sodium, tolvaptan may be safely dose escalated from 15 mg once daily to a maximum effective dose of 60 mg once daily for multiple days, to achieve optimal aqauretic effects. In terms of drug interactions, co-administration of moderate to potent CYP3A4 inhibitors and inducers should be avoided. Tolvaptan should also be co-administered with caution and proper monitoring in the presence of P-glycoprotein substrate and strong inhibitors. Co-administration of tolvaptan with diuretic therapy did not appear to alter the aquaretic effect of tolvaptan; and was shown to be safe and well tolerated.