Mechanisms of cross-talk between different classes of signaling molecules are inadequately understood. We have used clonal Madin-Darby canine kidney (MDCK-D1) epithelial cells as a model system to investigate the effects of extracellular nucleotides (e.g. ATP, UTP), which promote increase in activity of several phospholipases, on cAMP production. In contrast to observations in some other cell systems, ATP and UTP, acting via P2 purinergic receptors, stimulated cAMP production in MDCK-D1 cells. At maximally effective concentrations, ATP and UTP were not additive with the beta-adrenergic receptor agonist isoproterenol, but were synergistic with forskolin in increasing cAMP production, indicating that G alpha s is activated by these nucleotides. Additionally, we found that (a) nucleotide-induced increases in cAMP were blocked by indomethacin, a cyclooxygenase inhibitor, (b) arachidonic acid increased cellular cAMP levels in an indomethacin-sensitive fashion, and (c) PGE2, the major metabolite of arachidonic acid, stimulated cAMP formation. Overall, our results suggest a mechanism by which extracellular nucleotides stimulate release of arachidonic acid which is metabolized to PGE2 which, in turn, acts in an autocrine/paracrine fashion via prostaglandin receptors to activate G alpha s and increase cAMP. Based on the ability of extracellular nucleotides to stimulate the formation and release of prostaglandins in MDCK-D1 epithelial and other cells, we hypothesize that receptor-mediated prostaglandin release may be a general mechanism that regulates cAMP formation in many types of cells.