Disruption of the cyr1 gene of Schizosaccharomyces pombe, which encodes adenylyl cyclase, did not confer lethality to fission yeast cells, although they grew 40% slower than wild-type strains in complete medium. These cells contained no measurable amount of cAMP and no adenylyl cyclase activity. When h+ and h- cyr1 disruptants were mixed, they underwent mating even in rich medium. Propagation of homothallic cyr1 disruptants was difficult, probably because such cells readily mate and produce asci and thus stop growing. A greater than 10-fold increase in the amount of cyr1 mRNA was observed when cloned cyr1+ was introduced into Sch. pombe cells on a multicopy plasmid. The total adenylyl cyclase activity was similarly high in these transformants. However, the level of intracellular cAMP was hardly affected. Evidence suggests that this was not due to increased phosphodiesterase activity. Thus, cAMP level in growing fission yeast cells appears to be regulated not by the amount of adenylyl cyclase protein but by a feedback mechanism at the enzyme level. The cAMP level fell by approximately 50% under nitrogen starvation, which triggers sexual development in Sch. pombe. We suggest that fission yeast controls the level of intracellular cAMP primarily to regulate sexual development rather than to drive or arrest the cell cycle.