Corticostatic peptides are a family of arginine-rich cysteine-rich peptides that inhibit ACTH-stimulated corticosterone (B) production in rat adrenal cell suspensions. In this communication we describe a new method for the facile isolation and purification of these basic peptides from rabbit adult lung. We then describe the isolation and sequences of the four rabbit peptides, CSI, CSII, CSIII, and CSIV, and compare their biological activities in the ACTH (150 pg/ml) inhibition assay. CSI is by far the most potent of the four peptides. Using CSI as a model, we then studied its effects on the proximal and distal parts of the pathway leading to the generation of cAMP. CSI had no effect on (Bu)2cAMP action on forskolin or cholera toxin in their ability to mimic ACTH and increase B production in rat adrenal cells, nor did CSI have any effect on the stimulation of B production by pertussis toxin. Endogenous cAMP stimulated by ACTH decreased after the addition of CSI, which pointed to the inhibition of ACTH binding to explain the mode of action of this corticostatin. Displacement of the specific binding of labeled ACTH by CSI and the ACTH antagonist ACTH-(6-24) was determined, and indeed, CSI did displace ACTH from its binding site. The question of what portion of the ACTH molecule was involved in the action of CSI was answered by studying ACTH-(1-13) acetyl amide (alpha MSH) and ACTH-(1-18) amide. CSI had no effect on alpha MSH stimulation of B production, but did lower the production of B stimulated by ACTH-(1-18) amide. Therefore, CSI must act on ACTH-(14-18), which is part of the so-called address region of ACTH, which is -Gly14-Lys15-Lys16-Arg17-Arg18-, the very basic part of the molecule. These results indicate that CSI acts by competing with ACTH for its binding receptor on the adrenal cell and that this competition is confined to amino acids 14-18 of the molecule when it is bound to the receptor.