We have previously used cyclic nucleotide-gated (CNG) channels as sensors to measure cAMP signals in human embryonic kidney (HEK)-293 cells. We found that prostaglandin E(1) (PGE(1)) triggered transient increases in cAMP concentration near the plasma membrane, whereas total cAMP levels rose to a steady plateau over the same time course. In addition, we presented evidence that the decline in the near-membrane cAMP levels was due primarily to a PGE(1)-induced stimulation of phosphodiesterase (PDE) activity, and that the differences between near-membrane and total cAMP levels were largely due to diffusional barriers and differential PDE activity. Here, we examine the mechanisms regulating transient, near-membrane cAMP signals. We observed that 5-min stimulation of HEK-293 cells with prostaglandins triggered a two- to threefold increase in PDE4 activity. Extracellular application of H89 (a PKA inhibitor) inhibited stimulation of PDE4 activity. Similarly, when we used CNG channels to monitor cAMP signals we found that both extracellular and intracellular (via the whole-cell patch pipette) application of H89, or the highly selective PKA inhibitor, PKI, prevented the decline in prostaglandin-induced responses. Following pretreatment with rolipram (a PDE4 inhibitor), H89 had little or no effect on near-membrane or total cAMP levels. Furthermore, disrupting the subcellular localization of PKA with the A-kinase anchoring protein (AKAP) disruptor Ht31 prevented the decline in the transient response. Based on these data we developed a plausible kinetic model that describes prostaglandin-induced cAMP signals. This model has allowed us to quantitatively demonstrate the importance of PKA-mediated stimulation of PDE4 activity in shaping near-membrane cAMP signals.