Phospholipid metabolities and phospholipids containing arachidonic acid (AA) inhibited the antidiuretic hormone (ADH)-induced increase in transepithelial water flow in the toad urinary bladder, but had no effect on basal water flow when added to the serosal bathing solution. Other fatty acid-substituted phospholipid metabolites had no effect on osmotic water movement in the presence or absence of ADH. Indomethacin attenuated the inhibitory effects of the AA containing phospholipid metabolities (PMAA), suggesting that the PMAA response required AA release and prostaglandin (PG) formation. PMAA increased PGE formation as measured by radioimmunoassay. PG have been reported to inhibit ADH-stimulated water flow by inhibiting adenylcyclase. PGE2 (10-8 M) had no effect on cyclic AMP-stimulated water flow, whereas exogenous AA and PMAA attenuated the hydroosmotic response to added cyclic AMP. Indomethacin only partially reversed the inhibition by AA of the cyclic AMP-associated water movement, suggesting that the inhibition by AA and PMAA may involve other metabolites of AA than PG. PG and the AA cascade have been implicated as cellular modulators of the ADH hydroosmotic response. The present results offer additional support to the theory that this system may regulate the intracellular events that are transduced following receptor activation by ADH.