Acidic phospholipids play a critical role in the hormone activation of adenylate cyclase. Solubilized myocardial adenylate cyclase is unresponsive to glucagon and the catecholamines, two of the hormones which activate the membrane-bound enzyme. Phosphatidylserine, purified from bovine brain restored glucagon responsiveness of the solubilized adenylate cyclase. Monophosphatidylinositol, also purified from bovine brain, restored catecholamine responsiveness. Solubilized preparations of myocardial adenylate cyclase bind 125-I-glucagon either in the presence of added phosphatidylserine, thereby providing a clear separation of the processes of activation and binding. Solubilized myocardial adenylate cyclase has a molecular weight of about 160,000. Sephadex G-100 chromatography of the solubilized enzyme following the binding of 125-I-glucagon to its myocardial receptor reveals two distinct peaks; one, having catalytic activity and a molecular weight greater than 100,000 and two, the binding material having no catalytic activity and a molecular weight of 24,000-28,000. These data are consistent with the presence of a dissociable glucagon receptor site. The role of this dissociation in the activation-inactivation of the enzyme remains to be explored. It is postulated that phospholipids induce the required configurational change in the catalytic site following the binding of hormone to its receptor, and by this means couples the receptor to the catalytic site. This model may be applicable to certain clinical situations. Cardiac adenylate cyclase is unresponsive to glucagon in chronic congestive heart failure. The defect may reside either in the binding of glucagon to its receptor site or in the metabolism of a specific acidic phospholipid such as phosphatidylserine.