A mathematical model is presented that describes the effects of hormone concentration on receptor saturation and biological response in systems dependent upon the generation of a secondary mediator such as cyclic AMP. The analysis makes the following assumptions: (i) the binding of hormone to its receptor is a reversible, second-order reaction; (ii) the concentration of mediator that is generated is directly proportional to the number of membrane binding sites occupied by hormone; and (iii) the binding of the mediator with its intracellular receptor to generate an effector complex is also second-order and results in a proportionate biological response. It follows from this treatment that the hormone concentration required for half-maximal biological response is formally lower than that required for half-maximal receptor saturation and that the difference between these two concentrations will depend upon the ratio of total mediator generated at full receptor occupancy to the dissociation constant of the mediator with its receptor. Without invoking concepts of negative cooperativity, this model offers a simple explanation for discrepancies between receptor occupancy and biological response curves that are often observed. Moreover, the mathematical form of the predicted biological response curves conforms to the shape of the response curves observed experimentally in a wide variety of systems.