Absence of physiological concentrations of extracellular Ca2+ in the Krebs-Henseleit incubation buffer did not affect the ability of 10 nM glucagon (< 5%) to increase hepatocyte intracellular cyclic AMP concentrations, but severely ablated (by approximately 70%) the ability of 10 nM insulin to decrease these elevated concentrations. Cyclic AMP metabolism is determined by production by adenylate cyclase and degradation by cyclic AMP phosphodiesterase (PDE). In the absence of added extracellular Ca2+ (2.5 mM), insulin's ability to activate PDE activity was selectively compromised, showing a failure of insulin to activate two of the three insulin-stimulated activities, namely the 'dense-vesicle' and peripheral plasma-membrane (PPM) PDEs. In the absence of added Ca2+, insulin's ability to inhibit adenylate cyclase activity in intact hepatocytes was decreased dramatically. Vasopressin and adrenaline (+ propranolol) failed to elicit the activation of either the 'dense-vesicle' or the PPM-PDEs. The presence of physiological concentrations of extracellular Ca2+ in the incubation medium is shown to be important for the appropriate generation of insulin's actions on cyclic AMP metabolism.