The peptide hormone prolactin is a functionally versatile hormone produced by the vertebrate pituitary. Comparative studies over the last six decades have revealed that a conserved function for prolactin across vertebrates is the regulation of ion and water transport in a variety of tissues including those responsible for whole-organism ion homeostasis. In teleost fishes, prolactin was identified as the "freshwater-adapting hormone", promoting ion-conserving and water-secreting processes by acting on the gill, kidney, gut and urinary bladder. In mammals, prolactin is known to regulate renal, intestinal, mammary and amniotic epithelia, with dysfunction linked to hypogonadism, infertility, and metabolic disorders. Until recently, our understanding of the cellular mechanisms of prolactin action in fishes has been hampered by a paucity of molecular tools to define and study ionocytes, specialized cells that control active ion transport across branchial and epidermal epithelia. Here we review work in teleost models indicating that prolactin regulates ion balance through action on ion transporters, tight-junction proteins, and water channels in ionocytes, and discuss recent advances in our understanding of ionocyte function in the genetically and embryonically accessible zebrafish (Danio rerio). Given the high degree of evolutionary conservation in endocrine and osmoregulatory systems, these studies in teleost models are contributing novel mechanistic insight into how prolactin participates in the development, function, and dysfunction of osmoregulatory systems across the vertebrate lineage.