We describe the effect of cyclic AMP on regulation of the proportion of prespore and prestalk cells in Dictyostelium discoideum. Prespore and prestalk cells from slugs were enriched on Percoll density gradients and allowed to regulate in suspension culture under 100% oxygen. The transition of prespore to prestalk cells is blocked by cAMP, while cAMP phosphodiesterase and caffeine cause a decrease in the number of prespore cells. This suggests that extracellular cAMP plays a role in cell type proportioning by inhibiting the conversion of prespore to prestalk cells. Low concentrations of cAMP prevent the conversion of prestalk to prespore cells; the same effect is seen with hydrolysis products of cAMP, 5 AMP, adenosine and also adenine. We suggest that, when low concentrations of cAMP are added to regulating cells, the cAMP itself is quickly broken down and the breakdown products thereafter inhibit the prestalk-to-prespore conversion. The relevance of these findings is discussed in the context of an non-positional double-negative feedback model for cell type homeostasis.