A kidney cell line (MDCK) retains an adenylate cyclase system sensitive to glucagon, vasopressin, isoproterenol and prostaglandin E1. The stimulatory effect of glucagon on cAMP production was selectively lost in a cloned line derived from MDCK cells transformed by Harvey murine sarcoma virus. Sensitivity to glucagon was largely restored by treatment of the transformed cells with prostaglandin E1 or butyrate. Loss and reappearance of glucagon receptors seemed to be responsible for the observation. The parental MDCK line produced prostaglandins and in the transformed line, this function was abolished. These observations suggest that synthesis of glucagon receptors is controlled by endogenously produced prostaglandin in MDCK cells and that loss of glucagon receptors and their responsiveness in the transformed cells occurs as a consequence of the inability of these cells to synthesize this prostaglandin.