The adenylate cyclase of cultured differentiated RL-PR-C hepatocytes is desensitized to 1-isoproterenol by exposure to this beta-agonist. Virtually complete desensitization occurred by 60 min (intact cells) or 30 min (isolated plasma membranes). Isoproterenol was maximally effective at 10 micrometers, although substantial desensitization occurred at isoproterenol concentrations as low as 10 nM. Protein synthesis was not required for desensitization. Recovery from desensitization under tissue culture conditions was only 25% complete by 24 h. Maximum desensitization was accompanied by only a modest 35% decrease in binding sites (as determined by binding assays with [3H]dihydroalprenolol), with no change in binding affinity. Adenylate cyclase desensitized to 1-isoproterenol responded normally to guanine nucleotides and to fluoride, suggesting that the regulatory and catalytic proteins were not the sites of the desensitization "defect'. Using N-ethylmaleiimide to inactive the regulatory and catalytic proteins, and dicyclohexylcarbodiimide to inactivate the beta-adrenergic receptor, of intact hepatocytes, various heterologous cell fusion hybrids were produced, and their adenylate cyclases tested for responsiveness to 1-isoproterenol; only hybrids containing "desensitized' receptor failed to respond to isoproterenol. These results suggest that the mechanism of desensitization to isoproterenol involves only the receptor component of the receptor-regulatory protein(s)-adenylate cyclase complex, and that the receptors are reduced in number and/or ability to interact with the regulatory protein as a result of the desensitization process.