Suspensions of endocrine pancreas cells were prepared by shaking collagenase-isolated rat islets of Langerhans in calcium-free buffer. When incubated with 1.0 mM substrate at pH 7.4, the cells split Pi from 5'-AMP at a rate of 87 nmol/h per microgram DNA, and from beta-glycerophosphate at a rate of 25 nmol/h per microgram DNA. Km for 5'-AMP was about 54 microM. Adenosine or theophylline inhibited the 5'-AMP hydrolysis. Homogenization of the cells increased the activity toward 5'-AMP by 23% and that toward beta-glycerophosphate by 115%. Injecting rats with cortisone had no effect on the 5'-AMP hydrolysis by whole cells but significantly increased the activity in cell homogenates; the intracellular activity toward 5'-AMP was more than doubled by the cortisone treatment. Staining whole islet cells for 5'-AMP-splitting activity resulted in a demarcation of the cell periphery in control rats. Cells from cortisone-treated rats showed heavier deposits of reaction product, and their cell periphery did not stand out as clearly. It is suggested that 5'-nucleotidase is largely an ectoenzyme in normal rat islet cells. The cells also contain an as yet unidentified intracellular phosphatase that seems to be solely responsible for the increased hydrolysis of 5'-AMP in cortisone-treated rats.