In previous studies, we have shown that calcitonin gene-related peptide (CGRP) acutely inhibits 45Ca2+ uptake in osteoblastic UMR106 cells, and we have proposed that ATP-sensitive potassium (KATP) channels are involved in mediating this action of CGRP. To directly test this proposed mechanism, we have now examined the effects of CGRP on both membrane potential (Em) and K+ mobilization in UMR106 cells, using specific fluorometric dye assays. CGRP (0.01–100 nm) induced membrane hyperpolarization in a dose-dependent manner, with a half maximal effect (ED50) at approximately 0.2 nm and a maximal effect at 100 nm. Both pinacidil (Pina; a KATP channel opener) and forskolin (FSK) induced similar membrane hyperpolarization, but the actions of these three agents could be easily distinguished: both CGRP and Pina actions were well antagonized by glibenclamide (Glib; a selective KATP channel blocker), whereas FSK action was strongly attenuated only by tetraethylammonium (a KCa channel blocker) or compound H-89 (an inhibitor of cAMP-dependent protein kinases). Cells pretreated with Pina no longer responded to CGRP, but they could still respond to FSK; furthermore, pretreatment with FSK failed to block successive treatment with either CGRP or Pina. In parallel with observed changes in Em, CGRP (0.01–100 nm) decreased intracellular K+ concentrations ([K+]i) in a dose-dependent manner, with an ED50 identical to that obtained for alterations in Em. This action of CGRP was sensitive to Glib and had only slight sensitivity to tetraethylammonium; this CGRP effect was mimicked by Pina but not by FSK. Interestingly, CGRP significantly elicited changes in cell shape by a Glib-sensitive mechanism that included notable decreases in cross-sectional cytoplasmic area. These observations strongly support our proposal that CGRP primarily stimulates K+ efflux via activation of KATP channels and thereby induces membrane hyperpolarization in UMR106 cells. Furthermore, our data also suggest that this cascade of initial cellular events may result in rapid changes in cell morphology and decreases in cellular area of the type that are thought to act as triggers for proliferation and/or differentiation in many cellular phenotypes.