In this paper we describe changes in spectral reflectivity of the light reflectors (iridophores) of the squid Alloteuthis subulata. The spectral changes that can be seen in living squid, can also be brought about by superfusing whole skin preparations with acetylcholine (ACh) (20 micro mol l(-1)) and muscarine (30 micro mol l(-1)) but not nicotine (up to 50 mmol l(-1)), suggesting that cholinergic muscarinic receptors are involved. Changing the osmolarity of the external solution had no effect on spectral reflectivity. To study the iridophores at the cellular level, iridophores were isolated enzymatically. Lucifer Yellow filled the iridophores uniformly, showing cellular individuality. Isolated iridophore cells were loaded with Fura-2 AM and cytoplasmic Ca(2+) was recorded ratiometrically. Intracellular Ca(2+) (resting concentration at 66.16 nmol l(-1)) increased transiently after addition of ACh (50 micro mol l(-1)), muscarine (25 micro mol l(-1)), but not nicotine (up to 5 mmol l(-1)). Ca(2+) also increased when superfused with potassium chloride (10 mmol l(-1)) and caffeine (2.5 mmol l(-1)). Hypo- and hyperosmotic solutions had no effects on the cytoplasmic Ca(2+). By presenting direct evidence that iridophores are polarised cellular structures containing Ca(2+) stores and that they are activated via cholinergic muscarinic receptors, we demonstrate that Ca(2+) is involved in the reflectivity changes of the iridophores of A. subulata. Specimens were prepared for transmission electron microscopy. It was found that the orientations of the plates with respect to the skin surface are in good agreement with the expected orientations based on the prediction that the iridophores act as multilayer reflectors.