The mechanism of P-site inhibition of adenylyl cyclase has been probed by equilibrium binding measurements using 2'-[3H]deoxyadenosine, a P-site inhibitor, and by kinetic analysis of both the forward and reverse reactions (i.e. cyclic AMP and ATP synthesis, respectively). There is one binding site for 2'-deoxyadenosine per C1/C2 heterodimer; the Kd is 40 +/- 3 microM. Binding is observed only in the presence of one of the products of the adenylyl cyclase reaction, pyrophosphate (PPi). A substrate analog, Ap(CH2)pp (alpha,beta-methylene adenosine 5'-triphosphate), and cyclic AMP compete for the P-site in the presence of PPi, but P-site analogs do not compete for substrate binding (in the absence of PPi). Kinetic analysis indicates that release of products from the enzyme is random. These facts permit formulation of a model for the adenylyl cyclase reaction, for which we provide substantial kinetic support. We propose that P-site analogs act as dead-end inhibitors of product release, stabilizing an enzyme-product (E-PPi) complex by binding at the active site. Although product release is random, cyclic AMP dissociates from the enzyme preferentially. Release of PPi is slow and partially rate-limiting.