The effect of calcium on adenylate cyclase from rabbit small intestine has been studied using a particulate preparation obtained from isolated epithelial cells. Both basal and vasoactive intestinal peptide-stimulated activities were inhibited by calcium concentrations in the micromolar range. In the presence of calmodulin, a biphasic response was obtained. At low calcium concentration (4 X 10(-9)-6 X 10(-8) M) the enzyme was activated up to 50%. As the Ca2+ concentration was increased, the enzyme was concomitantly inhibited. Half-maximal inhibition of calmodulin-dependent activity was obtained at 1 microM free Ca2+. The activation of the enzyme was also dependent on the concentration of Mg2+. At less than 1 microM Ca2+, the enzyme exhibited a biphasic response, being activated at below 3 mM Mg2+ and inhibited at higher concentrations. At Ca2+ concentrations that were inhibitory, the enzyme did not show the biphasic response to Mg2+. At concentrations above 3 mM, the maximal rate (Vmax) remained constant. Vmax was inversely proportional to the concentration of Ca2+ present. Calmodulin altered Vmax when acting on vasoactive intestinal peptide-stimulated enzyme. Calmodulin had no effect on the Km for hormone activation. The calmodulin-dependent activity was inhibited by incubation with trifluoperazine.