In Dictyosteliurn, extracellular cAMP interacts specifically with cell-surface receptors to promote the accumulation of a variety of intracellular second messengers, such as, 3'-5' cyclic adenosine monophosphate (CAMP) and 1,4,5 inositol trisphosphate (IP3). We and others have shown that activation of the cell-surface cAMP receptor can also modulate the expression of the Dictyosleliurn genome during development. In at least one instance, synthesis of intracellular cAMP is required for appropriate gene regulation. However, the induction of most CAMP-dependent gene expression can occur in the absence of receptor-mediated activation of adenylate cyclase and a consequent accumulation of intracellular CAMP. These results suggest that other intracellular second messengers produced in response to receptor activation may potentially act as signal transducers to modulate gene expression during development. In vertebrate cells, IP3 and diacylglycerol (DAG) are intracellular activators of specific protein kinases; they are produced in equimolar amounts by cleavage of phosphoinositol bisphosphate after a receptor-mediated activation of a membrane-bound phosphodiesterase. IP3 and, thus, by inference, diacylglycerol are synthesized in Dictyosteliurn as a response to cAMP interacting with its cell-surface receptor. Using defined conditions to inhibit the accumulation of extracellular CAMP, we have examined the effects of these compounds on the expression of genes that require cAMP for their maximal expression. Our results suggest that intracellular IP3 and DAG may in part mediate the action of extracellular cAMP on the expression of the Dictyosteliurn genome.