Little is known about how a morphogenetic rearrangement of a tissue is effected by the individual cells. Starving Dictyostelium discoideum cells aggregate to form dendritic streams which then break up into groups of ∼2 x 104 cells. Cell number is sensed using counting factor (CF), a secreted complex of polypeptides. A high extracellular concentration of CF causes an aggregation stream to break up. We find that CF slowly down-regulates the cAMP-induced cGMP pulse by inhibiting guanylyl cyclase activity. On the other hand, CF significantly potentiates the cAMP-induced cAMP pulse size through the up-regulation of the adenylyl cyclase. Both the cAMP-induced cAMP and cGMP pulses are dramatically smaller in REMI-11 cells, which over-express REMI-11 protein, a smlA second site suppressor. CF does not affect the cAMP receptor, its interaction with its associated G proteins, or the translocation of the CRAC to the membrane in response to cAMP. Pulsing streaming wild-type cells with a high concentration of cAMP results in the formation of small groups, whereas reducing cAMP pulse size with exogenous cAMP phosphodiesterase during stream formation causes cells to form large groups. Altering the extracellular cAMP pulse size does not phenocopy the effects of CF on the cAMP-induced cGMP pulse size or cell-cell adhesion, indicating that CF does not regulate cGMP pulses and adhesion via CF's effects on cAMP pulses. We also show that Ca 2+ is required for CF's function although the mechanism is not clear. Computer simulations indicated that stream breakup could be caused by CF decreasing cell-cell adhesion and/or increasing cell motility, and we have previously observed that CF does indeed decrease cell-cell adhesion. We further demonstrated that CF increases cell motility. In Dictyostelium, motility is mediated by actin and myosin. CF increases the amounts of polymerized actin and ABP-120. Reducing motility using drugs which interfere with actin polymerization inhibits stream dissipation resulting in larger groups. CF also potentiates the phosphorylation and redistribution of myosin. Our results indicate that CF may regulate myosin function and cell polarity, at least in part, through activating protein kinases Akt/PKB and PAKa. CF thus appears to induce the morphogenesis of streams into evenly-sized groups by decreasing adhesion, increasing actin polymerization, increasing myosin phosphorylation, and increasing cell polarity.