In testicular Leydig cells, forskolin causes the expected stimulation of cAMP and testosterone production and potentiates gonadotropin-induced responses, when present in concentrations of 1-10 microM. In addition, when added at lower doses that did not affect cAMP generation and testosterone responses (100 nM), forskolin caused an increase in sensitivity to hormonal stimulation for all cAMP pools (extracellular, intracellular, and receptor-bound) and a 70% reduction in the ED50 for human chorionic gonadotropin (hCG) stimulation of testosterone production. Forskolin-induced increases in receptor-bound cAMP were less effective than those elicited by hCG in stimulating steroidogenesis. In contrast to the well-known stimulatory actions of forskolin, low doses of the diterpene (in the picomolar to nanomolar range) markedly inhibited the production of cAMP and testosterone. Such inhibitory actions of low-dose forskolin were prevented by preincubation of Leydig cells with pertussis toxin before addition of forskolin and/or hCG. Low concentrations of forskolin also inhibited adenylate cyclase activation by GTP and luteinizing hormone, and this effect was prevented by pretreatment of cell membranes with pertussis toxin. These studies have defined the stimulatory effects of forskolin on Leydig-cell cAMP pools, including potentiation of the hormonal increase in receptor-bound cyclic AMP by forskolin, and have provided additional evidence for the functional importance of cAMP compartmentalization during hormonal stimulation of steroidogenesis. We have also demonstrated a novel, high-affinity inhibitory action of forskolin upon adenylate cyclase activity and cyclic AMP generation, an effect that appears to be mediated by the Ni guanine nucleotide regulatory subunit of adenylate cyclase.