Treatment of pigeon erythrocyte membranes with cholera toxin and NAD+ enhanced the GTP stimulation and suppressed the F- activation of the adenylate cylase [ATP pyrophosphate-lyase (cyclizing), EC 126.96.36.199]. In the presence of NAD+ labeled with 32P in the AMP moiety the toxin catalyzed the covalent incorporation of radioactivity into membrane proteins with molecular weights (Mrs) of 200,000, 86,000, and 42,000. Extraction of toxin-treated membranes with Lubrol PX followed by affinity chromatography on a GTP-Sepharose column resulted in a 200-fold purification of the 42,000-Mr labeled protein and in its complete separation from the other labeled proteins. The fraction containing the purified GTP-binding component from toxin-treated membranes conferred an enhanced GTP-stimulated activity on adenylate cyclase solubilized from nontreated membranes. Likewise, the addition of GTP-binding fraction from nontreated membranes to an enzyme solubilized from toxin-treated membranes restored F- stimulation of the adenylate cyclase. The toxin-induced modification of adenylate cyclase and the incorporation of radioactivity into the 42,000-Mr protein were partially reversed upon incubation with toxin and nicotinamide at pH 6.1. The results indicate that cholera toxin affects the adenylate cyclase system by catalyzing an ADP-ribosylation of the 42,000-Mr component bearing the guanyl nucleotide regulatory site.