Muscarinic stimulation of cultured fibroblasts decreases initial rates of cAMP accumulation in response to hormones 50–70%. This inhibitory effect of muscarinic stimulation on cAMP accumulation in intact cells was desensitized 65–75% by a 60 min pretreatment with the muscarinic agonist carbachol (10 μM), with a t 1 2 of 11 min. The carbachol pretreatment resulted in a diminished carbachol inhibition of adenylate cyclase in broken cell preparations. The phospholipid monooleylphosphatidate (MOPA) which also inhibited hormone-stimulated cAMP accumulation with a half maximal effect at 0.03 μM (as compared with 0.5 μM for carbachol), displayed many of the characteristics of muscarinic inhibition such as loss of activity with time of pretreatment. However, fibroblasts did not become desensitized to prolonged MOPA treatment; rather, it appeared that the MOPA was being inactivated. Also, the desensitization to carbachol did not prevent further inhibition by MOPA. The inhibitory effects of maximal doses of MOPA and carbachol in combination were no greater than the effect of carbachol alone, suggesting that they shared an intermediate in their inhibition of cAMP accumulation. These results are consistent with the hypothesis that muscarinic inhibition of adenylate cyclase is mediated by the formation of a phospholipid. However, the desensitization to the cholinergic stimulus does not appear to involve the intermediate, but rather a modification at the receptor level.