Previous studies have shown that guanine nucleotides, acting at a site termed nucleotide regulatory site, are required for activation of hepatic adenylate cyclase and that glucagon facilitates this process. This study shows that only guanine nucleotides containing triphosphate groups at the 5' position of ribose (or 3'-deoxyribose) are capable of activating the enzyme. The terminal phosphate is not utilized in the activation process since 5'-guanylylimidodiphosphate (Gpp(NH)p and 5'-guanylyl methylenediphosphonate, analogues of GTP that are not utilized in transferase or hydrolase reactions, stimulate enzyme activity. The nucleotides bind in their free form at the regulatory site; chelation by magnesium ion shifts the apparent concentration dependence for activation by Gpp(nh)p. GDP inhibits competitively Gpp(NH)p-stimulated activity and inhibits basal activity and activities stimulated by glucagon. Activation of the enzyme by Gpp(NH)p is a slow process; the length of the lag time increases as an inverse function of nucleotide concentration and is as long as 4 min before onset of increased enzyme activity. Following pretreatment with Gpp(NH)p and extensive washing of hepatic membranes, the enzyme displays immediate increases in activity with rates that are a function of the nucleotide concentration during pretreatment; the rates remain constant for at least 6 min despite the absence of Gpp(NH)p in the medium. Studies with labeled Gpp(NH)p show that the intact nucleotide remains firmly bound to the membranes after extensive washing, suggesting that the persistence of adenylate cyclase activity may be related to slow dissociation of the nucleotide from the regulatory site. Addition of 1 nM glucagon, a submaximal concentration, does not abolish the lag phase of Gpp(NH)p activation even at saturating concentration of the nucleotide (1 muM or higher). The maximal steady state rate is achieved under these conditions. Addition of 2 muM glucagon, a saturating hormone concentration, does not alter the steady state rate but abolishes the lag phase of Gpp(NH)p activation. The transient kinetics of Gpp(NH)p activation and the effects of glucagon thereon are discussed in terms of a three state model in which the guanine nucleotide induces the formation of an intermediate transition state that displays no increase in enzyme activity over the basal state and which slowly isomerizes to a high activity state of the adenylate cyclase system; glucagon acts by accelerating the rate of isomerization.