The aim of the present study was to clarify the mechanisms mediating the effect of a glucagon‐like peptide‐1 (GLP‐1) mimetic on solute‐free water excretion in rats. The GLP‐1 mimetic exenatide (0.05–5.0 nmol/kg, i.m.), alone and in combination with either a vasopressin V2 receptor antagonist (15 nmol/kg, i.p.) or vasopressin (0.01 nmol/kg, i.m.), was injected into control and water‐loaded (water 10–50 mL/kg, p.o., or 50 mL/kg of 0.6% NaCl, i.p.) rats to evaluate the role of collecting duct water permeability in the hydrouretic effect. Urinary prostaglandin (PG) E2 excretion and the effects of diclofenac (5 mg/kg, i.m.) and GLP‐1 receptor antagonist (0.15 μmol/kg, i.p.) on exenatide action were assessed. The hydrouretic effect of exenatide was equivalent following oral or intraperitoneal water loading, and was proportional to the volume of water administered. Injection of exenatide, under conditions of a maximal decrease in collecting duct water permeability (V2 receptor antagonist administration in water‐loaded rats), additionally stimulated solute‐free water formation. The GLP‐1 receptor antagonist weakened the hydrouretic action of exenatide. Urinary PGE2 excretion increased following water loading (47 ± 6 vs 24 ± 4 ng/kg over a 30 min period) and was enhanced as a result of additional exenatide injection (69 ± 10 ng/kg). Diclofenac and vasopressin delayed the hydrouretic effect of exenatide. The effect of exenatide on solute‐free water clearance in water‐loaded rats is presumably mediated by stimulation of PGE2 secretion and reinforcement of tubular fluid influx from the proximal tubule to the distal segment of the nephron and collecting duct.