Hyaluronidase treatment of mouse oligodendroglioma cells in monolayer culture resulted in a 4-5-fold stimulation of hyaluronate synthetase, assayed in washed membrane preparations [Philipson, L., & Schwartz, N. B. (1984) J. Biol. Chem. 259, 5017-5023]. We now report studies on the mechanism of the hyaluronidase-induced increase in the specific activity of the membrane-bound synthetase complex. The stimulation was dependent on the concentration of hyaluronidase but not on the particular bond cleaved or the nature of the product generated. Analysis of chain growth during cell-free synthesis by the disaccharide ratio method suggested that substantial internal labeling of hyaluronate chains had occurred. With both treated and untreated membranes, greater than 90% of incorporated (and recovered) radioactivity appeared in unsaturated disaccharides. Further analysis showed that hyaluronidase treatment increased both the rate of elongation and the rate of release of elongated chains from the enzyme complex. Hyaluronidase treatment also caused a change in the apparent steady-state kinetic patterns of double-reciprocal plots from intersecting lines for membranes from control cells to a family of parallel lines. Both the overall stimulation of synthesis and the change in apparent kinetic pattern were reversed by brief incubation of washed cells in the absence of hyaluronidase. These results have led to the development of an explicit kinetic model for hyaluronate synthesis which suggests an explanation for the switch in apparent kinetic patterns based on changing concentrations of a postulated key intermediate.