Primary cultures of ovine pars tuberalis (PT) cells of the pituitary were established to investigate the mode of action of melatonin. The heterogeneous population of cells was shown to bind the radioligand 2-[125I]-melatonin over 72 h in culture, although there was a progressive decline in specific binding with time. In cells cultured for 24 h, forskolin (1 μmol/l) was found to stimulate a 12-fold increase in cyclic AMP accumulation. This response could be inhibited by melatonin in a dose-dependent manner, with an IC50 of approx. 6 pmol/l. However, melatonin did not inhibit basal levels of cyclic AMP. In homogenates of ovine PT, forskolin stimulated a dose-dependent increase in cyclic AMP, although the magnitude of this response was found to be lower than that observed in cells. This response was not inhibited by either 10 nmol or 1 μmol melatonin/l, and was also unaffected by GTP. These results provide the first evidence that the melatonin-binding site on ovine PT, recently characterized using the radioligand 2-[125I]-melatonin, functions as a physiological receptor.