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Antidiuretic hormone (ADH), also known as vasopressin, plays a crucial role in regulating water balance within the body. It is produced in the hypothalamus and stored in the posterior pituitary gland. When the body is dehydrated or when blood osmolality (the concentration of solutes in the blood) increases, ADH is released into the bloodstream.

ADH acts primarily on the kidneys, promoting the reabsorption of water in the collecting ducts. This process helps to concentrate urine and retain water, thereby decreasing urine output and conserving water in the body. This mechanism is vital for maintaining homeostasis, ensuring that the body's fluid levels remain stable and preventing excessive loss of water.

In contrast, other hormones like adrenaline, cortisol, and insulin serve different functions: adrenaline is involved in the fight-or-flight response, cortisol is a stress hormone that regulates metabolism and immune response, and insulin is primarily responsible for glucose metabolism and blood sugar regulation. Therefore, the specific action of ADH in managing water balance makes it the correct choice.