The enterotoxin from Vibrio cholerae is a protein of 100,000 mol wt which stimulates adenylate cyclase activity ubiquitously. The binding of biologically active 125I-labeled choleragen to cell membranes is of extraordinary affinity and specificity. The binding may be restricted to membrane-bound ganglioside GM1. This ganglioside can be inserted into membranes from exogenous sources, and the increased toxin binding in such cells can be reflected by an increased sensitivity to the biological effects of the toxin. Features of the toxin-activated adenylate cyclase, including conversion of the enzyne to a GTP-sensitive state, and the increased sensitivity of activation by hormones, suggest analogies between the basic mechanism of action of choleragen and the events following binding of hormones to their receptors. The action of the toxin is probably not mediated through intermediary cytoplasmic events, suggesting that its effects are entirely due to processes involving the plasma membrane. The kinetics of activation of adenylate cyclase in erythrocytes from various species as well as in rat adipocytes suggest a direct interaction between toxin and the cyclase enzyme which is difficult to reconcile with catalytic mechanisms of adenylate cyclase activation. Direct evidence for this can be obtained from the comigration of toxin radioactivity with adenylate cyclase activity when toxin-activated membranes are dissolved in detergents and chromatographed on gel filtration columns. Agarose derivatives containing the "active" subunit of the toxin can specifically absorb adenylate cyclase activity, and specific antibodies against the choleragen can be used for selective immunoprecipitation of adenylate cyclase activity from detergent-solubilized preparations of activated membranes. It is proposed that toxin action involves the initial formation of an inactive toxin-ganglioside complex which subsequently migrates and is somehow transformed into an active species which involves relocation within the two-dimensional structure of the membrane with direct perturbation of adenylate cyclase molecules (virtually irreversibly). These studies suggest new insights into the normal mechanisms by which hormone receptors modify membrane functions.