Binding of catecholamines to the beta-adrenergic receptor results in the activation of adenylate cyclase and the intracellular formation of adenosine 3',5'-monophosphate (cAMP). In the past 20 years the events that lead from hormone binding at the cell surface receptor site to the synthesis of cAMP at the inner layer of the membrane have been intensively studied. Signal transduction in this system involves the sequential interaction of the beta-adrenergic receptor with the guanine nucleotide-binding protein (Gs) and the adenylate cyclase catalyst (C). The mechanism of signal transduction from the receptor through Gs to C, as well as the role of the adenylate cyclase inhibitory G protein Gi, is discussed.