The purpose of the present study was to examine the mechanism of the stimulatory effect of substance P (SP) on cyclic AMP (cAMP) accumulation in dog iris sphincter. We found that: (1) SP increased cAMP accumulation in a time- and concentration-dependent manner, the T1/2 and EC50 values being 1.2 min and 44 nM, respectively. SP has no effect on inositol trisphosphate and muscle contraction in this tissue. (2) SP-stimulated cAMP formation was inhibited by quinacrine, a non-specific phospholipase A2 inhibitor (IC50 = 9.5 microM), and by indomethacin (Indo), a cyclooxygenase inhibitor (IC50 = 3.5 nM), in a concentration-dependent manner, suggesting that SP induces cAMP accumulation via an Indo-sensitive pathway. (3) SP-induced arachidonic acid release and SP-induced prostaglandin E2 (PGE2) release were inhibited concentration dependently by quinacrine and Indo, with IC50 values of 11 microM and 0.8 nM, respectively. (4) PGE2 (1 microM) increased cAMP formation in the sphincter muscle by 94%, and, furthermore, the PG, but not SP, stimulated the activity of adenylyl cyclase in membrane fractions isolated from this tissue. (5) Indo (1 microM) blocked the relaxing effect of SP (1 microM) in iris sphincter precontracted with carbachol (1 microM). (6) The inhibitory effect of Indo on SP-induced cAMP accumulation was species specific. Increases in cAMP represent a mechanism by which extracellular SP can regulate smooth muscle function. Thus, we conclude from these studies that in dog iris sphincter SP-induced cAMP accumulation is mediated through PGs, and that in this cholinergically innervated muscle SP via cAMP could function, in part, to modulate the physiological responses to muscarinic receptor stimulation.