The effect of vasopressin on the toad urinary bladder has been shown to be mediated by cyclic AMP. It has been assumed that, as demonstrated for other systems, this involves activation of cyclic AMP-dependent protein kinase. In order to test this hypothesis we investigated the effect of vasopressin on cyclic AMP-dependent protein kinases in epithelial cells of toad bladders. About 80% of protein kinase activity and cyclic AMP-binding capacity was found to be in the cytosol. DEAE-cellulose chromatography showed a pattern of 15--20% type I and 80--85% type II cyclic AMP-dependent protein kinase. Cytosolic kinase was activated 3--4-fold by cyclic AMP with half-maximal activation at 5 . 10(-8) M. Similarly, half-maximal binding of cyclic AMP occurred at 7 . 10(-8) M. Incubation of toad bladders in Ringer's solution containing 0.1 mM 3-isobutyl-1-methylxanthine, prior to homogenization and assay, showed stable cyclic AMP-binding capacity and protein kinase ratio --cyclic AMP/+cyclic AMP. Exposure of bladders to 10 mU/ml of vasopressin for 10 min caused intracellular activation of protein kinase and decrease in cyclic AMP-binding capacity that were maintained for at least 30 min. Incubation of bladders with increasing concentrations of vasopressin (0.5--100 mU/ml) resulted in a discrepancy between a progressive increase in cyclic AMP levels and a levelling off at 10 mU/ml of vasopressin for the changes in protein kinase ratio and cyclic AMP-binding capacity. The increase in kinase ratio was due to higher activity in the absence of exogenous cyclic AMP and was fully inhibitable by a specific protein kinase inhibitor. Using Sephadex G-25-CM50 column chromatography for separation of holoenzyme and free catalytic subunit we demonstrated that the activation of protein kinase in the vasopressin-treated bladders is due to intracellular dissociation of the kinase. These results show that the effect of vasopressin on the toad bladder involves activation of a cytosolic cyclic AMP-dependent protein kinase. The time course and the dose-response curve of the kinase activation closely parallel vasopressin's effect on osmotic water flow.