In clinical medicine, hyponatremia is highly prevalent and frequently misdiagnosed, leading to substantial mismanagement and iatrogenic morbidity. Its differential diagnosis includes numerous diseases with diverse etiologies, making accurate assessment challenging. Despite extensive literature and guidelines on hyponatremia, most patients do not receive adequate evaluation due to the limitations of diagnostic algorithms, which rely on low-value clinical signs and are unable to identify concurrent conditions. In this review, we examine the range of laboratory tests available for hyponatremia assessment. Understanding renal mechanisms of solute and water exchange (e.g., fractional excretion) is essential for selecting appropriate tests and interpreting their diagnostic value. Additionally, detailed electrolyte and acid-base assessments remain critical for establishing a definitive diagnosis. We comprehensively discuss the selection of laboratory tests for specific differential diagnoses of hyponatremia. Importantly, in cases of acute hyponatremia, rapid correction should take precedence over a complete diagnostic workup. Ultimately, a thorough understanding of laboratory evaluation is crucial for accurately diagnosing hyponatremia. This paper critically reviews the available literature and explores relevant diseases in the context of associated laboratory parameters.