Recent evidence suggests that ethanol initially causes an increase in receptor-dependent cAMP levels, followed by heterologous desensitization of receptors coupled to GS after chronic exposure. Here we investigated the role of adenosine in mediating these responses. We found that ethanol caused accumulation of extracellular adenosine in NG108-15 and S49 lymphoma cells. This adenosine activated adenosine receptors to increase intracellular cAMP levels. The addition of adenosine deaminase, to degrade accumulated extracellular adenosine, or isobutyl-methylxanthine, an adenosine receptor antagonist, completely blocked ethanol-induced increases in cAMP levels in NG108-15 cells. Chronic exposure of NG108-15 and S49 wild type cells to ethanol resulted in heterologous desensitization of adenosine receptor- and prostaglandin E1 receptor-dependent cAMP signal transduction. Coincubation of NG108-15 and S49 wild type cells with adenosine deaminase and ethanol for 48 hr prevented heterologous desensitization. Moreover, mutant S49 cells, which are unable to transport adenosine, did not accumulate extracellular adenosine after incubation with ethanol and did not develop ethanol-induced heterologous desensitization. Our results suggest that adenosine is an important mediator of both the acute and chronic effects of ethanol on cAMP signal transduction.