Brush-border and basal-lateral membranes were prepared from rabbit intestinal epithelial cells by differential centrifugation and MgCl2 precipitation. The ADP-ribosylation of proteins in these fractions when incubated with [adenylate-32P]NAD+ and cholera toxin was investigated. Three proteins of molecular mass 45, 40 and 37 kDa were labelled in a toxin-dependent manner in each membrane fraction. The incorporation of 32P-labelled ADP-ribose was 18-fold greater in brush-border membranes than in basal-lateral membranes, comparable to the enrichment of sucrase (marker enzyme for the brush border) in these membranes. There was a 20% release of the 40 and 45 kDa proteins from the brush-border membrane following this ADP-ribosylation. Activation of adenylate cyclase by both cholera toxin and sodium fluoride was 2.7- and 2.3-fold greater, respectively, in basal-lateral membranes than in brush-border membranes, comparable to the enrichment of Na+/K+-ATPase (marker enzyme for the basal-lateral membrane) in these membranes. The effect of sodium fluoride on membranes pretreated with cholera toxin revealed no increase in adenylate cyclase activity above that due to the toxin. This presumably means that both toxin and fluoride activate adenylate cyclase by the same regulatory protein. The results show that cholera toxin catalyzes the ADP-ribosylation of regulatory proteins in the brush-border membrane, and these proteins then migrate to the basal-lateral membrane where they activate the catalytic component of adenylate cyclase.