Spermatozoa of the sea urchin Arbacia punctulata possess a phosphorylated guanylate cyclase as a major glycoprotein of the flagellar plasma membrane. When sperm cells contact the jelly layer surrounding the egg, the peptide "resact" binds the sperm cell surface and triggers the dephosphorylation of the cyclase. A large decrease in cyclase activity accompanies dephosphorylation. Before treatment of sperm cells with egg jelly the enzyme contains 17.95 +/- 1.24 moles phosphate per mole cyclase. After treatment of sperm cells with egg jelly this number decreases to 2.57 +/- 0.42. Based on a molecular weight of 137,250 for the peptide chain, approximately 15 phosphate groups are lost per molecule of guanylate cyclase at fertilization.