Narcotics affect adenylate cyclase [ATP pyrophosphate-lyase (cyclizing), EC 4.6.1.1] in two opposing ways, both mediated by the opiate receptor. The first process is the readily reversible inhibition of the enzyme by narcotics; the second is a compensatory increase in enzyme activity which is delayed in onset and relatively stable. Late positive regulation of the enzyme counteracts the inhibitory influence of morphine and is responsible for narcotic dependence and tolerance. The coupled inhibitory and positive regulatory mechanisms for adenylate cyclase provide a means of activating and deactivating neural circuits hours after the initial event and thus may play a role in a memory process.