We observed previously that activation of N-methyl-D-aspartate (NMDA) receptors in area CA1 of the hippocampus, through either NMDA application or long-term potentiation (LTP)-inducing high-frequency stimulation (HFS), results in an increase in cyclic AMP. In the present study, we performed experiments to determine the mechanism by which NMDA receptor activation causes this increase in cyclic AMP. As the NMDA receptor-mediated increase in cyclic AMP is dependent upon extracellular calcium, we hypothesized that NMDA receptors are coupled to adenylyl cyclase (AC) via calcium/calmodulin. In membranes prepared from area CA1, AC was stimulated by calcium in the presence of calmodulin, and the effect of calcium/calmodulin on AC in membranes was blocked by the calmodulin antagonists N-(6-aminohexyl)-5-chloro-1- naphthalenesulfonamide (W-7) and trifluoperazine (TFP). In intact hippocampal slices, W-7 and TFP blocked the increase in cyclic AMP levels caused by both NMDA application and HFS of Schaffer collateral fibers. Exposure of hippocampal slices to elevated extracellular potassium to induce calcium influx also caused increased cyclic AMP levels; the increase in cyclic AMP caused by high potassium was also blocked by W-7 and TFP. These data support the hypothesis that NMDA receptor activation is positively coupled to AC via calcium/calmodulin and are consistent with a role for cyclic AMP metabolism in the induction of NMDA receptor-dependent LTP in area CA1 of the hippocampus.