AtT20/D16v is a clonal strain of mouse pituitary tumor cells which synthesizes and secretes ACTH. Somatostatin, a hypothalamic tetradecapeptide, has been shown to inhibit the release of PRL, GH, and TSH from the pituitary gland. We have characterized specific binding sites for somatostatin on AtT20/D16v cells and demonstrate that somatostatin inhibits stimulated ACTH release by these cells. Equilibrium binding studies with [125I]Tyr1]somatostatin showed the presence of a single class of noninteracting binding sites on AtT20/D16v cells. Half-maximal binding of somatostatin occurred at 1.7 X 10(-9) M, and there were 26,300 binding sites/cell. The binding of [125I]Tyr1]somatostatin was not significantly inhibited by the hypothalamic peptides TRH, LHRH, and substance P. Somatostatin had no consistent effect on basal ACTH secretion by AtT20/D16v cells, but it inhibited ACTH secretion stimulated with either 50 mM KCl or a hypothalamic extract. Half-maximal inhibition occurred with 4 X 10(-10) M somatostatin. TRH, LHRH, and substance P at concentrations of 10(-7) M were without effect. Somatostatin had no effect on either basal or stimulated hormone secretion by GH12C1 or F4C1 cells, two cell strains which lack specific somatostatin-binding sites. A critical concentration of extracellular calcium was required for the stimulation of ACTH secretion in AtT20/D16v cells. No response to 50 mM KCl occurred in the presence of EGTA or cobalt. Increased extracellular calcium overcame the inhibition of stimulated hormone secretion by EGTA, cobalt, and somatostatin. Therefore, we conclude that the inhibition of stimulated ACTH secretion by somatostatin involves the interaction of the peptide with specific binding sites on AtT20/D16v cells and the inhibition of stimulus-elicited calcium influx.