In rat pancreatic islets the effects of diamide, which has been shown to decrease islet levels of reduced glutathione (GSH), and of exogenous GSH were investigated on cyclic AMP as increased by glucose, p-chloromercuribenzoate, and aminophylline. In addition the effect of diamide on islet ATP level, low Km and high Km phosphodiesterases was studied. Diamide (0.1 mM) inhibited the increase of cyclic AMP (cAMP) in response to glucose (16.7 mM), and p-chloro-mercuribenzoate (1 mM) in the presence of 5.6 mM glucose. No inhibitory effect of diamide could be demonstrated when cAMP was raised by 10 mM aminophylline in the presence of 5.6 mM glucose. The glucose (27.7 mM) stimulated increase of cAMP was further augmented by GSH (0.4 mM) whereas GSH in the presence of 5.6 mM glucose had no such effect. Diamide neither affected islet high Km nor low Km cAMP-phosphodiesterases. Diamide (0.1 mM) as used in this study did not affect islet AMP levels. A concentration dependent decrease of ATP was observed, however, with higher concentrations of diamide (0.25, 0.5 and 1.0 mM). It is suggested that the accumulation of islet cAMP in response to glucose and para-chloromercuribenzoate depends on the redox state of islet thiols. Since thiol oxidant diamide neither affected cAMP-phosphodiesterase activities nor inhibited aminophylline induced accumulation of cAMP in the presence of low glucose the possibility is raised that in pancreatic islets the formation of cAMP rather than its degradation depends on the redox state of islet thiols.