Antidiuretic hormone (ADH), also known as vasopressin, is produced in the hypothalamus and stored in the posterior pituitary gland. Its primary function is to regulate water balance in the body by promoting water reabsorption in the kidneys. When ADH is released, it increases the permeability of the renal tubules, allowing more water to be absorbed back into the bloodstream, thus concentrating urine and conserving water. This action is critical in maintaining homeostasis regarding body fluid levels and blood pressure.