cGMP mediates vertebrate phototransduction by directly gating cationic channels on the plasma membrane of the photoreceptor outer segment. This second messenger is produced by a guanylate cyclase and hydrolyzed by a light-activated cGMP-phosphodiesterase. Both of these enzyme activities are Ca2+ sensitive, the guanylate cyclase activity being inhibited and the light-activated phosphodiesterase being enhanced by Ca2+. Changes in these activities due to a light-induced decrease in intracellular Ca2+ are involved in the adaptation of photoreceptors to background light. We describe here experiments to characterize the guanylate cyclase activity and its modulation by Ca2+ using a truncated rod outer segment preparation, in order to evaluate the enzyme's role in light adaptation. The outer segment of a tiger salamander rod was drawn into a suction pipette to allow recording of membrane current, and the remainder of the cell was sheared off with a probe to allow internal dialysis. The cGMP-gated channels on the surface membrane were used to monitor conversion of GTP, supplied from the bath, into cGMP by the guanylate cyclase in the outer segment. At nominal 0 Ca2+, the cyclase activity had a Km of 250 microM MgGTP and a Vmax of 25 microM cGMP s-1 in the presence of 1.6 mM free Mg2+; in the presence of 0.5 mM free Mg2+, the Km was 310 microM MgGTP and the Vmax was 17 microM cGMP s-1. The stimulation by Mg2+ had an EC50 of 0.2 mM Mg2+ for MgGTP at 0.5 mM. Ca2+ inhibited the cyclase activity. In a K+ intracellular solution, with 0.5 mM free Mg2+ and 2.0 mM GTP, the cyclase activity was 13 microM cGMP s-1 at nominal 0 Ca2+; Ca2+ decreased this activity with a IC50 of approximately 90 nM and a Hill coefficient of approximately 2.0.