In patients with congestive heart failure and renal dysfunction, high dose of diuretics are necessary to improve congestion, which may progress to renal dysfunction. We examined the efficacy of tolvaptan with reduction of loop diuretics to improve renal function in patients with congestive heart failure and renal dysfunction. We conducted a multicenter, prospective, randomized study in 44 patients with congestive heart failure and renal dysfunction (serum creatinine concentration ≥1.1 mg/dl) treated with conventional diuretics. Patients were randomly divided into two groups: tolvaptan (15 mg) with a fixed dose of diuretics or with reducing to a half-dose of diuretics for 7–14 consecutive days. We examined the change of urine volume, body weight, serum creatinine and electrolyte concentrations in each group. Both groups demonstrated significant urine volume increase (724 ± 176 ml/day in the fixed-dose group and 736 ± 114 ml/day in the half-dose group) and body weight reduction (1.6 ± 1.5 kg and 1.6 ± 1.9 kg, respectively) from baseline, with no differences between the two groups. Serum creatinine concentration was significantly increased in the fixed-dose group (from 1.60 ± 0.47 to 1.74 ± 0.66 mg/dl, p = 0.03) and decreased in the half-dose group (from 1.98 ± 0.91 to 1.91 ± 0.97 mg/dl, p = 0.10). So the mean changes in serum creatinine concentration from baseline significantly differed between the two groups (0.14 ± 0.08 mg/dl in the fixed-dose group and −0.07 ± 0.19 mg/dl in the half-dose group, p = 0.006). The administration of tolvaptan with reduction of loop diuretics was clinically effective to ameliorate congestion with improving renal function in patients with congestive heart failure and renal dysfunction.