(A) Restricted propagation model. On activation of the Gs protein-coupled receptor (GPCR), the adenylyl cyclase (AC) synthetizes cAMP. The phospodiesterases (PDEs), by degrading cAMP, limit the diffusion of cAMP to the whole cells and restrict cAMP propagation from the focal point of synthesis at the plasma membrane to a downstream PKA target (target A), leading to its selective phosphorylation. (B) Nanodomain regulation model. cAMP freely propagates from the site of synthesis at the plasma membrane to the entire cell. PDEs anchored at specific subcellular sites act as a sink for cAMP, maintaining the level of the second messenger below the bulk cytosol and preventing activation of local PKA (exemplified by target B complex). At other sites, the absence of local PDEs and concomitant factors (see text for more details) allow for cAMP to accumulate locally at levels higher than bulk cytosol, leading to selective phosphorylation (target A). According to this model, the functional outcome of the cAMP signal is dictated by the local levels of the second messenger in the extremely restricted environment immediately surrounding specific effector/target protein complexes. PDE, shown here in different shades of blue to illustrate the diversity of the multiple isoforms, localize to specific subcellular sites via protein–lipid or protein–protein interactions (not shown for simplicity) which limit random diffusion of these enzymes.