We have characterized a magnesium-dependent guanylate cyclase in homogenates of Dictyostelium discoideum cells. 1) The enzyme shows an up to 4-fold higher cGMP synthesis in the presence of GTP analogues with half-maximal activation at about 1 microM guanosine 5'-O-(3-thio)triphosphate (GTP gamma S) or 100 microM guanosine 5'-(beta, gamma-imido)triphosphate; little or no stimulation was observed with GTP, guanosine mono- and diphosphates or with adenine nucleotides, with the exception of the ATP analogue adenosine 5'-(beta, gamma-imido)triphosphate. 2) Both basal and GTP gamma S-stimulated guanylate cyclase activity were rapidly lost from homogenates as was the ability of GTP gamma S to stimulate the enzyme after cell lysis. 3) Inclusion of 25 microM GTP gamma S during cell lysis reduced the KM for GTP from 340 to 85 microM and increased the Vmax from 120 to 255 pmol/min.mg protein, as assayed in homogenates 90 s after cell lysis. 4) Besides acting as an activator, GTP gamma S was also a substrate for the enzyme with a KM = 120 microM and a Vmax = 115 pmol/min.mg protein. 5) GTP gamma S-stimulated, Mg2+-dependent guanylate cyclase was inhibited by submicromolar concentrations of Ca2+ ions, and by inositol 1,4,5-trisphosphate in the absence of Ca2+ chelators. 6) Guanylate cyclase activity was detected in both supernatant and pellet fractions after 1 min centrifugation at 10,000 x g; however, only sedimentable enzyme was stimulated by GTP gamma S. We suggest that the Mg2+-dependent guanylate cyclase identified represents the enzyme that in intact cells is regulated via cell surface receptors, and we propose that guanine nucleotides are allosteric activators of this enzyme and that Ca2+ ions play a role in the maintenance of the enzyme in its basal state.