Teleost pigment cells (erythrophores and melanophores) are useful models for studying the regulation of rapid, microtubule-dependent organelle transport. Previous studies suggest that melanophores regulate the direction of pigment movements via changes in intracellular cAMP (Rozdzial and Haimo, 1986a; Sammak et al., 1992), whereas erythrophores may use calcium- (Ca(2+)-) based regulation (Luby-Phelps and Porter, 1982; McNiven and Ward, 1988). Despite these observations, there have been no direct measurements in intact erythrophores or any cell type correlating changes of intracellular free Ca2+ ([Ca2+]i) with organelle movements. Here we demonstrate that extracellular Ca2+ is necessary and that a Ca2+ influx via microinjection is sufficient to induce pigment aggregation in erythrophores, but not melanophores of squirrel fish. Using the Ca(2+)-sensitive indicator, Fura-2, we demonstrate that [Ca2+]i rises dramatically concomitant with aggregation of pigment granules in erythrophores, but not melanophores. In addition, we find that an erythrophore stimulated to aggregate pigment will immediately transmit a rise in [Ca2+]i to neighboring cells, suggesting that these cells are electrically coupled. Surprisingly, we find that a fall in [Ca2+]i is not sufficient to induce pigment dispersion in erythrophores, contrary to the findings obtained with the ionophore and lysed-cell models (Luby-Phelps and Porter, 1982; McNiven and Ward, 1988). We find that a rise in intracellular cAMP ([cAMP]i) induces pigment dispersion, and that this dispersive stimulus can be overridden by an aggregation stimulus, suggesting that both high [cAMP]i and low [Ca2+]i are necessary to produce pigment dispersion in erythrophores.