In adipocyte membranes, cholera toxin may ADP-ribosylate the islet-activating protein (IAP) substrate, under certain conditions. Covalent modification is maximal in the absence of a guanosine triphosphate; in the presence of 5'-guanylylimidodiphosphate, incorporation of [32P]ADP-ribose is markedly reduced. ADP-ribosylation by cholera toxin has similar functional consequences as does IAP-mediated modification, i.e. the biphasic response of isoproterenol-stimulated adenylate cyclase to GTP and the inhibition by N6-phenylisopropyladenosine is abolished, and only the stimulatory phase remains. In contrast, membranes treated with cholera toxin in the presence of GTP display both the stimulatory and inhibitory responses to GTP. The binding of the adenosine analog [3H]N6-phenylisopropyladenosine is increased in the presence of GTP. Treatment of the membranes with IAP, but not with cholera toxin in the absence of GTP, reverses this GTP effect on [3H]N6-phenylisopropyladenosine binding. However, [3H]N6-phenylisopropyladenosine binding is still sensitive to GTP in membranes treated with cholera toxin in the presence of GTP. In adipocyte and cerebral cortical membranes, the IAP substrate appears as a 39,000/41,000-Da doublet which does not appear to reflect protease activity. On two-dimensional polyacrylamide gels, these two proteins migrate with approximate pI values 6.0 and 5.6, respectively. Although both behave similarly under all conditions explored in this study, it is unknown whether both, or only one, are involved in inhibition of adenylate cyclase activity. These results extend the already striking homology between the adenylate cyclase complex and the visual system. Ni, as well as transducin, may be ADP-ribosylated by cholera toxin and by IAP, and, in all cases, there are functional consequences.