When Arbacia punctulata spermatozoa are incubated in seawater containing ammonium hydroxide (pH 8.8), the sperm plasma membrane-bound guanylate cyclase is dephosphorylated, its electrophoretic mobility increases (from an apparent molecular mass of 160 to 150 kD), and its enzymatic activity decreases 3.5-fold. Transfer of these cells into ammonium-free seawater (pH 7.4) results in the rephosphorylation of the cyclase, its reconversion to 160 kD, and recovery of the enzymatic activity lost upon dephosphorylation. This is the first direct demonstration that the activity of membrane-bound guanylate cyclase can be regulated by phosphorylation. A plasma membrane preparation is described that specifically supports the in vitro phosphorylation of the guanylate cyclase. This preparation will be useful in more detailed studies on the relationship between phosphorylation state and enzymatic activity of membrane-bound guanylate cyclase.