Adenylyl cyclase in Dictyostelium, as in higher eukaryotes, is activated through G protein-coupled receptors. Insertional mutagenesis into a gene designated dagA resulted in cells that cannot activate adenylyl cyclase, but have otherwise normal responses to exogenous cAMP. Neither cAMP treatment of intact cells nor GTP gamma S treatment of lysates stimulates adenylyl cyclase activity in dagA mutants. A cytosolic protein that activates adenylyl cyclase, CRAC, has been previously identified. We trace the signaling defect in dagA- cells to the absence of CRAC, and we demonstrate that dagA is the structural gene for CRAC. The 3.2-kb dagA mRNA encodes a predicted 78.5-kD product containing a pleckstrin homology domain, in agreement with the postulated interaction of CRAC with activated G proteins. Although dagA expression is tightly developmentally regulated, the cDNA restores normal development when constitutively expressed in transformed mutant cells. In addition, the megabase region surrounding the dagA locus was mapped. We hypothesize that CRAC acts to connect free G protein beta gamma subunits to adenylyl cyclase activation. If so, it may be the first member of an important class of coupling proteins.