(Bu)2cAMP inhibits the action of testicular Mullerian inhibiting substance (MIS) in vitro, but it is unknown whether the intracellular nucleotide diminishes production of MIS by the testis or interferes with its action at the Mullerian duct. When added to the 14 1/2-day old rat embryo Mullerian duct in organ culture, (Bu)2cAMP (0.1 or 1.0 mM) inhibited regression caused by biologically active exogenous MIS fractions, as well as that produced by the fetal testis (1.0 mM). Dibutyryl cyclic guanosine 3',5'-monophosphate was ineffective against exogenous MIS fractions or the fetal testis. The phosphodiesterase inhibitor, methyl-isobutyl-xanthine, had the same inhibitory effect on the MIS-fraction (0.1 or 1.0 mM), as well as against MIS secreted from the fetal testis (1.0 mM). Theophylline at 1.0 mM inhibited the action of the MIS fraction. The presence of (Bu)2cAMP in the medium was required for at least the first 24 h of the 72-h incubation to significantly inhibit MIS action. These results indicate that intracellular cAMP inhibits the action of MIS at the Mullerian duct itself by a potentially reversible change in the cells. We speculate that cAMP may act by altering the state of differentiation in the cells, perhaps by mediating phosphorylation of intracellular (and extracellular) proteins.