Current assays for functional activation of Gs-coupled receptors usually involve quantitation of adenylyl cyclase or measurement of cAMP concentration by radioimmunoassay. The activation of Gq-coupled receptors is commonly assayed by measurement of the production of inositol triphosphate or diacylglycerol from phosphatidylinositol 4,5-bisphosphate or of changes in intracellular calcium. These assays generally require large numbers of cells (10(5)-10(6)) and/or the use of radioactive materials. We have developed a rapid nonradioactive colorimetric assay that utilizes a beta-galactosidase (lacZ) gene fused to five copies of the cyclic AMP response element (CRE) to detect the activation of CRE-binding protein that results from an increase in intracellular cAMP or calcium. This assay can be performed using as few as 30,000 cells in a 96-well format with the end products measured simultaneously in a microplate reader. Consequently, a single individual can readily assay 1000 samples a day. Using this assay, the fold increase in beta-galactosidase activity was similar in magnitude to increases in cAMP or adenylyl cyclase activity and was approximately linear from 0.01 to 0.27 fmol/cell of intracellular cAMP. Furthermore, pharmacological characterization of one of the melanocortin receptors, mMC5-R, using this assay resulted in a similar order of potency for several melanocortin peptides to that obtained with a commonly used adenylyl cyclase enzyme assay. This assay is also useful for the characterization of Gq-coupled receptors as is demonstrated here using cells transfected with the mouse bombesin receptor. The large-scale capacity of this assay makes it an excellent method for screening molecules of interest acting on Gs- and Gq-coupled receptors.