Certain epithelial cell lines have morphologic, physiologic, biochemical and pharmacologic characteristics of transporting epithelia from intact organs. In this paper we show that dibutyryl cyclic AMP, 5' AMP, adenosine and cyclic AMP phosphodiesterase inhibitors stimulate hemicyst formation by the dog kidney cell line MDCK. It is suggested that this effect is explained by elevation of intracellular cyclic AMP levels by means of an exogenous non-metabolizable source of cyclic AMP, phosphodiesterase inhibition or adenyl cyclase stimulation. Since hemicyst formation is in part due to transepithelial fluid transport, these findings raise the possibility that this fraction might be modulated by cAMP in an established cell line. We believe that cultured epithelial cells may provide an exploitable model system to investigate at the cellular and subcellular levels, the mechanism by which cyclic AMP modifies water and solute movements across epithelia.