Intestinal guanylate cyclase mediates the action of the heat-stable enterotoxin to cause a decrease in intestinal fluid absorption and to increase chloride secretion, ultimately causing diarrhea. An endogenous ligand that acts on this guanylate cyclase has not previously been found. To search for a potential endogenous ligand, we utilized T84 cells, a human colon carcinoma-derived cell line, in culture as a bioassay. This cell line selectively responds to the toxin in a very sensitive manner with an increase in intracellular cyclic GMP. In the present study, we describe the purification and structure of a peptide from rat jejunum that activates this enzyme. This peptide, which we have termed guanylin, is composed of 15 amino acids and has the following amino acid sequence, PNTCEICAYAACTGC, as determined by automated Edman degradation sequence analysis and electrospray mass spectrometry. Analysis of the amino acid sequence of this peptide reveals a high degree of homology with heat-stable enterotoxins. Solid-phase synthesis of this peptide confirmed that it stimulates increases in T84 cyclic GMP levels. Guanylin required oxidation for expression of bioactivity and subsequent reduction of the oxidized peptide eliminated the effect on cyclic GMP, indicating a requirement for cysteine disulfide bond formation. Synthetic guanylin also displaces heat-stable enterotoxin binding to cultured T84 cells. Based on these data, we propose that guanylin is an activator of intestinal guanylate cyclase and that it stimulates this enzyme through the same receptor binding region as the heat-stable enterotoxins.