The selective loss of glucagon sensitivity of transformed MDCK cells can be restored by differentiation inducers, a process which requires RNA and protein synthesis and glycosylation. Although the glucagon dose-response curve of normal MDCK cells resembled that of liver and kidney (Kact = 10 nM), the transformed-induced cells were 10-fold less sensitive to the hormone [activation constant (Kact) = 100 nM]. Additionally, the stimulation of cAMP synthesis by a glucagon fragment (glucagon) in transformed-induced cells was greatly reduced compared to normal cells. The adenylate cyclase regulatory components of transformed-induced MDCK cell membranes seemed unaltered compared to the parental line. Both contained equivalent amounts of cholera and pertussis toxin substrates, and soluble extracts were equally capable of reconstituting isoproterenol responsiveness of S49 cyc- membranes. However, membrane fusion studies demonstrated that the glucagon sensitivity of transformed-induced membranes could not be reconstituted with heterologous membranes. When donor transformed-induced membranes (with inactivated adenylate cyclase) were fused with acceptor HeLa membranes (normally unresponsive to glucagon and prostaglandin E), such hybrids were unresponsive to glucagon, although responsiveness to prostaglandin E was evident. Parallel hybrids with normal MDCK membranes were responsive to both glucagon and prostaglandin E. This difference could not be explained by an inhibitory effect of transformed-induced membranes on receptor-adenylate cyclase coupling under the fusion conditions: the ability of these membranes to serve as an acceptor for the reconstitution of vasoactive intestinal peptide responsiveness was identical to that of normal MDCK cells. The data suggest that the glucagon sensitivity induced in transformed MDCK cells differs significantly from that of the parental line. However, these differences cannot be explained by alterations of transformed-induced membrane components relevant to the coupling of hormone receptors to adenylate cyclase.