The effect of rat hypothalamic extract (HE) on prolactin secretion by rat anterior pituitaries in vitro was studied to investigate the mode of action of the prolactin-inhibiting factor (PIF). Explants were incubated for 4 h at 37 ° C in a humidified atmosphere of 5 % CO2 in O2 in medium 199 or Earle’s saline. Prolactin in the medium was measured by disc electrophoresis and densitometry. Theophylline (6.7 mM) stimulated prolactin secretion by 50 % and GH secretion by 70%. Elevated potassium (54 mM) increased prolactin release from 16–39%. In low-calcium medium, theophylline restored the reduced prolactin secretion to control levels and increased growth hormone release by 40%. Rat HE inhibited secretion by 30–40% in 1.8 mM calcium medium, but it did not further inhibit the reduced release caused by incubation in low-calcium medium. Elevation of calcium 5–10 times over the 1.8 mM controls did not overcome PIF action. The adenohypophysial explants incubated in medium containing both HE and theophylline secreted as much prolactin as those incubated in control medium. It thus appeared that theophylline nullified PIF action. However, in comparison with the incubates with theophylline alone, in which prolactin secretion was stimulated over control levels, the HE had as much PIF activity in the presence of this methylxanthine as it did in its absence. Elevated potassium also overcame HE inhibition of prolactin release. However, prolactin release by pituitaries incubated with high K+ plus HE was only slightly lower than that of glands incubated with high K+ alone. Thus, PIF can be fully active in the presence of theophylline, but not in elevated K+. This suggests that high K+ and PIF act on the same process and theophylline influences secretion by a different mechanism. The results show that the inhibitory action of PIF is manifested only when sufficient extracellular calcium is present to support spontaneous secretion of prolactin. In addition, they suggest that PIF exerts a stabilizing action upon the plasma membrane of the lactotrope and this prevents calcium entry and initiation of prolactin release.