Treatment of rat liver plasma membranes with various commercial preparations of crude collagenase from Clostridium histolyticum at concentrations as low as 1 mug/ml, resulted in activation of the adenylate cyclase system. Maximal activation occurred at 50 to 100 mug/ml of collagenase, and promoted a 2- to 3-fold increase in the basal activity as well as in the activities stimulated by catecholamines, glucagon, fluoride, or GTP. This was due to an increase in the maximal velocity of the cyclizing reaction without any increase in the affinity of the enzyme for its substrate. Treatment of plasma membranes with crude collagenase did not induce gross structural modifications as judged by electron microscopic examination. 5'-Nucleotidase activity was slightly inhibited and ATPase activity remained unaffected. The stimulatory substance was nondialyzable, thermolabile, and inhibited by both EDTA and -SH reagents, thus appearing to be a protein. The following observations suggest the effects observed were due to other protease(s) present in crude collagenase: (a) only crude collagenase was active on liver adenylate cyclase: treatment with purified collagenase from C. histolyticum or from Achromobacter iophagus gave no stimulation; (b) the stimulatory activity was irreversible since washing of the membranes after treatment was without effect; (c) crude collagenase contained no lecithinase or sphingomyelinase activity under our conditions of adenylate cyclase assay; (d) after chromatography on Sephadex G-100, the activator appeared as a peak in the 30,000-dalton region and was clearly separated from the collagenase and clostripain peaks, but coincident with elastolytic and caseinolytic activities; (e) the effect of crude collagenase could be prevented by addition of elastin in vitro and was mimicked by purified elastase from hog pancreas. It remains to be seen whether the effects observed result from an increase in the catalytic constant of adenylate cyclase, or an unmasking of new catalytic sites.