MANY polypeptide hormones, prostaglandins, and catecholamines exert their physiological (and pathophysiological) effects by increasing intracellular cAMP concentration in their respective target cells. The first step in hormone action, binding to a specific plasma membrane receptor, leads to activation of the membranebound enzyme AC1 and formation of cAMP. Understanding how hormones activate AC, then, is central to understanding the mechanism of hormone action. Studies from numerous laboratories performed over the past decade have begun to clarify this problem. One of the major concepts to emerge from these studies is that guanine nucleotides (GN) play a critical role in mediating the effects of hormones on AC. This review will focus on the involvement of GN in regulation of hormone receptor-AC interaction. We will 1) detail the evidence that GN are required for hormonal stimulation of AC; 2) describe experiments showing that GN interact with a G unit2 and that the G unit is a discrete component of the AC complex;