Studies on the gonadotrophin-responsive adenylyl cyclase (AC) system of rabbit and porcine ovarian follicles reveal that hCG or LH-induced desensitization of the AC system can be divided into two phases: an initial, LH-specific phase and a second phase which is not specific for LH. The first phase occurs within the first hour after LH-hCG-receptor interaction, is agonist specific, and is not mediated by protein synthetic events or by cAMP. In view of our previous demonstration of the critical dependence of the LH-induced desensitizing process in cell-free membrane preparations of porcine follicles upon Mg2+ and ATP, we investigated the role of a phosphorylation reaction in the first phase of the AC desensitizing process. Porcine follicular membranes rich in LH-sensitive AC activity were found to contain the molecular requirements necessary for a phosphorylation reaction: namely, cAMP-dependent and cAMP-independent protein kinases as well as phosphoprotein phosphatases. The following lines of indirect evidence indicated that reversal or resensitization of the desenzitized AC system to LH was mediated by a dephosphorylation reaction. Activators of endogenous phosphoprotein phosphatases--Mn2+ and dithiothreitol--promoted a specific resensitization of the follicular AC system to LH. Likewise, a partially purified phosphoprotein phosphatase also resensitized the desensitized, LH unresponsive AC to LH, and boiling of the phosphatase prevented its effect. LH-induced desensitization of the AC system, on the other hand, did not appear to be mediated by a cAMP-dependent protein kinase, as evidenced both by the inability of beef heart protein to promote desensitization of AC and by the inability of an inhibitor of cAMP-dependent protein kinase to prevent LH-induced densensitization. The second phase of desensitization, which occurs after the first hour following hCG-LH-receptor interaction, is characterized by a loss of responsiveness to FSH as well as to LH and can be promoted by dibutryl cAMP (in the absence of LH). These results provide new evidence on the characteristics and molecular mechanism of LH-induced densensitization of the follicular AC system. These results indicate that the level of phosphorylation of membrane-associated components may, in part, regulate the activity of the AC system during this first phase of homologous desensitization.