Prolactin was shown to activate adenylate cyclase in broken cellular enzyme preparations from rat renal medulla. Likewise, vasopressin was effective on this enzyme system. Parathyroid hormone was similarly active in the renal cortex. The simultaneous administration of vasopressin and prolactin to medullary kidney slices did not result in an additive effect in stimulating medullary adenyl cyclase. Audioradiographic techniques revealed a selective and prolonged localization of intravenously injected <sup>125</sup>I-prolactin to the thick limb of the loop of Henle, the distal tubule and the collecting duct. It is concluded that prolactin activates medullary adenylate cyclase, and may do so by occupying ADH receptors.