The effects of microtubules on the phosphate-water oxygen exchange reactions catalyzed by dynein were examined in order to determine the mechanism by which microtubules activate the ATPase. Microtubules inhibited the rate of medium exchange observed during net ATP hydrolysis. Inhibition of the exchange reaction was proportional to the extent of microtubule activation of ATP turnover with no effect on the partition coefficient. These data argue that microtubules do not increase the rate of release of phosphate from dynein; rather, they increase the rate of ADP release. Microtubules markedly inhibited medium phosphate-water exchange reactions observed in the presence of ADP and Pi. With increasing concentrations of ADP, the rate of exchange increased in parallel to the dissociation of dynein from the microtubules, suggesting that only free dynein and not the microtubule-dynein complex catalyzes the exchange reaction. The rates of dynein binding to microtubules in the absence and presence of saturating ADP were 1.6 X 10(6) and 9.8 X 10(5) M-1 s-1, respectively. ADP inhibited the rate of the ATP-induced dissociation of the microtubule-dynein complex with an apparent Kd = 0.37 mM for the binding of ADP to the microtubule-dynein complex. However, the rate of dissociation of ADP from the M.D.ADP complex was quite fast (approximately 1000 s-1). These data support the postulate of a high-energy dynein-ADP intermediate and indicate that microtubules activate the dynein ATPase by enhancing the rate of ADP release.