Cyclophosphamide (CP) is a chemotherapeutic agent which is extensively used in the treatment of multiple neoplastic and nonneoplastic diseases like breast cancer, lymphomas, systemic lupus erythematosus, and multiple sclerosis. Dose‐limiting side effects, mainly nephrotoxicity is a major problem hindering its use in the clinical practice. CP induces nephrogenic syndrome of inappropriate antidiuresis mostly via the activation of arginine vasopressin V₂ receptors. Moreover, CP produces reactive metabolites which is responsible for augmentation of lipid peroxidation and oxidative stress. Tolvaptan (TOL) is a selective vasopressin V₂ receptor antagonist used in the treatment of clinically significant hyponatremia, volume overload in heart failure, and liver cirrhosis with edema. The present study aimed to investigate the potential protective effect of TOL in CP‐induced nephrotoxicity. Twenty‐four adult male albino rats were randomly divided into four groups: the control group, TOL group that treated daily with tolvaptan (10 mg/kg/d, orally), CP group where CP was administered intraperitoneally 75 mg/kg on days 3, 4, 5, 19, 20, and 21 of study, and the CP + TOL group where animals were treated with TOL daily with (10 mg/kg/d, orally) for 22 days with concomitant administration of CP as described before. Coadministration of TOL with CP induces significant improvement in the level of urine volume, serum Na+, serum osmolarity, urinary creatinine, and free water clearance in addition to significant reduction of body weight, serum creatinine, urea, serum K+, blood pressure, urine osmolarity, and the fractional excretion of sodium as compared to CP‐treated group. In addition, coadministration of TOL significantly reduced MDA, the marker of lipid peroxidation, and different pro‐inflammatory cytokines. Histopathological changes showed improvement in the signs of nephrotoxicity with the coadministration of TOL. Also, co‐treatment with TOL significantly decreased the level of markers of apoptosis as caspase‐3 and Bax with increased expression of antiapoptotic Bcl‐2 in renal tissue as compared to CP‐treated group.