Hormones and growth factors induce in many cell types the production of phosphatidic acid (PA), which has been proposed to play a role as a second messenger. We have previously shown in an acellular system that PA selectively stimulates certain isoforms of type 4 cAMP-phosphodiesterases (PDE4). Here we studied the effect of endogenous PA on PDE activity of transiently transfected MA10 cells overexpressing the PA-sensitive isoform PDE4D3. Cell treatment with inhibitors of PA degradation, including propranolol, induced an accumulation of endogenous PA accompanied by a stimulation of PDE activity and a significant decrease in both cAMP levels and protein kinase A activity. Furthermore, in FRTL5 cells, which natively express PDE4D3, pretreatment with compounds inducing PA accumulation prevented both cAMP increase and cAMP-responsive element-binding protein phosphorylation triggered by thyroid-stimulating hormone. To determine the mechanism of PDE stimulation by PA, endogenous phospholipids were labeled by preincubating MA10 cells overexpressing PDE4D3 with [(32)P]orthophosphate. Immuno- precipitation experiments showed that PA was specifically bound to PDE4D3, supporting the hypothesis that PDE4D3 activation occurs through direct binding of PA to the protein. PA binding site on PDE4D3 was characterized by engineering deletions of selected regions in the N-terminal regulatory domain of the enzyme. Deletion of amino acid residues 31-59 suppressed both PA-activating effect and PA binding, suggesting that this region rich in basic and hydrophobic residues contains the PA binding site. These observations strongly suggest that endogenous PA can modulate cAMP levels in intact cells, through a direct activation of PDE4D3.