Recent data on the effects of neurohypophysial peptides at the cellular level are discussed with respect to the two basic processes involved in peptide hormone action--i.e., specific recognition of the information contained in the hormonal molecule and the transformation of this information into a stimulus leading to the final biological response. Four main aspects of this general problem are considered. A. Hormone-Receptor Interaction: Recent contributions in this field concern partial analysis of the three-dimensional conformation of oxytocin and vasopressin moleculal cells of the mammalian kidney. Conformational analysis of oxytocin and vasopressin molecules leads to the conclusion that, in solution, these peptides probably have a compact and highly stabilized three-dimensional configuration. Models have been proposed that provide a valuable clue to the interpretation of structure-activity relationships among natural hormones and many structural analogues. Binding studies with tritiated oxytocin and vasopressin have permitted determination of the kinetic parameters of hormone-receptor interaction in amphibian epithelial cells and mammalian kidney. B. Stimulus Generation: The nature of the primary stimulus generated by hormone-receptor interaction is still unknown. In the epithelial target cells of the amphibian skin and bladder and of the mammalian kidney, one of the first consequences of hormone-receptor interaction is the activation of membrane-bound adenylate cyclase. Analysis of the correlations between hormonal binding and adenylate cyclase activation suggests that activation is a function of receptor occupation rather than of the number of hormonal molecules interacting with the receptor per unit of time. On medullary adenylate cyclase of pig kidney, the relation between receptor occupancy and enzyme activation was found to be complex and nonlinear. The effects of several agents (calcium, nucleotides) on receptor occupancy and adenylate cyclase activation have been described. In mammalian uterus and other smooth muscle target cells, there is no evidence for direct involvement of cyclic AMP in the contractile response to oxytocin and other neurohypophysial peptides.