Mammary gland slices from lactating guinea pigs were incubated for periods up to 1 h in 10(-2) M theophylline which completely inhibits lactose synthesis. Ultrastructural comparison with control slices shows a significant increase in the size of the Golgi field involving an apparent back-up of microvesicles. Normally distended Golgi cisternae are flattened and contain fewer, less dense, protein granules. Theophylline decreases by 50% both types of secretory vacuoles present: a compact, 300 nm vacuole containing one 250 nm granule, and a swollen, approximately 700 nm vacuole with one or more granules. Changes in granule shape, density and formation were also observed. The findings suggest that the site where theophylline ingibits lactose synthesis may be in the translocation of substances, from the rough endoplasmic reticulum to the Golgi complex, e.g. the specifier protein alpha-lactalbumin which is essential to the lactose synthetase complex. The significance to the role of cyclic nucleotides in lactation is discussed.