Y 1 adrenocortical cells respond to forskolin stimulation with increases in steroid secretion and change of shape. The rapid rounding of flat, adherent cells which occurs is known to involve dephosphorylation of the focal adhesion protein, paxillin. We have investigated the effects of a tyrosine phosphatase inhibitor, calpeptin (CP) on steroidogenesis and shape change in Y1 cells. Forskolin treatment (FSK, 2 pM) caused marked rounding of Y1 cells (FSK = 76.3 rfI 1.5 % cells rounded after 30 minutes, untreated = 2.9 k 0.7 % rounded); calpeptin pretreatment (CP; 100 ugiml) had little effect on shape (9.6 f 2.4% rounded) but blocked the rounding response to FSK (32.1 k 2.1 % rounded. Calpetin also eliminated the steroidogenic response to FSK (FSK = 242 k 14 % control; FSK + CP = 1 13 +_ I 8 9′0 control) without affecting production of steroid from membrane permeant 22R-OH-cholesterol. The results support the view that dephosphorylation of paxillin is important in the rounding response and provide evidence for the involvement of tyrosine-phosphatase activity in cyclic AMP-stimulated steroidogenesis in Y 1 cells