To address the role of protein phosphatases in regulating hormonal responses in mammalian cells, we investigated the effects of okadaic acid, a potent inhibitor of protein phosphatases 1 and 2A, on epinephrine and prostaglandin E1 stimulation of cAMP accumulation and adenylyl cyclase in S49 WT and kin- lymphoma cells. Depending on the dose and time of okadaic acid pretreatment of both cell lines, there were two distinguishable effects on cAMP accumulation, an augmentation and an inhibition. The augmentation occurred rapidly (t1/2 < 1 min), was maximal with 3 microM okadaic acid, and was observed with concentrations of okadaic acid as low as 0.3 microM. Prolonged (t1/2 of 5-15 min) pretreatment of cells with okadaic acid caused an inhibition of epinephrine-stimulated cAMP accumulation, which was characterized by a 2-3-fold increase in the EC50 for the response to epinephrine. The EC50 for the okadaic acid-mediated inhibition was similar to that for the augmentation. In assays of adenylyl cyclase in membrane fractions prepared from okadaic acid-pretreated cells the inhibitory, but not the stimulatory, effects of okadaic acid pretreatment were observed. The data demonstrate that protein phosphatases play an important role in regulating adenylyl cyclase and suggest that cAMP-dependent protein kinase is not involved in either of its actions.