The recent discovery of Epac, a novel cAMP receptor protein, opens up a new dimension in studying cAMPmediated cell signaling. It is conceivable that many of the cAMP functions previously attributed to cAMP-dependent protein kinase (PKA) are in fact also Epac-dependent. The finding of an additional intracellular cAMP receptor provides an opportunity to further dissect the divergent roles that cAMP exerts in different cell types. In this study, we probed cross-talk between cAMP signaling and the phosphatidylinositol 3-kinase/ PKB pathways. Specifically, we examined the modulatory effects of cAMP on PKB activity by monitoring the specific roles that Epac and PKA play individually in regulating PKB activity. Our study suggests a complex regulatory scheme in which Epac and PKA mediate the opposing effects of cAMP on PKB regulation. Activation of Epac leads to a phosphatidylinositol 3-kinase-dependent PKB activation, while stimulation of PKA inhibits PKB activity. Furthermore, activation of PKB by Epac requires the proper subcellular targeting of Epac. The opposing effects of Epac and PKA on PKB activation provide a potential mechanism for the cell type-specific differential effects of cAMP. It is proposed that the net outcome of cAMP signaling is dependent upon the dynamic abundance and distribution of intracellular Epac and PKA.Cyclic adenosine 3Ј,5Ј-monophosphate (cAMP) is produced as an intracellular second messenger in response to a variety of extracellular signals, including hormones, growth factors, and neurotransmitters. cAMP regulates a wide range of important biological processes, which, alongside cell metabolism, include cell division, growth, differentiation, secretion, memory, and neoplastic transformation. For many years, major intracellular effects of cAMP in mammalian cells were believed to be mediated by cAMP-dependent protein kinase (PKA).1 The regulation of PKA is achieved via a unique three-component signaling system in which PKA is composed of two separate subunits, the catalytic (C) and regulatory (R) subunits that interact to form an inactive holoenzyme complex (1). Although phosphorylation of Thr 197 in the activation loop of the C subunit is necessary for the maturation and optimal catalytic activity of PKA (2, 3), unlike most other kinases whose activity is regulated by dynamic phosphorylation/dephosphorylation of the activation loop this phosphorylation step does not seem to be a regulatory mechanism for PKA in vivo. Once phosphorylated, PKA is fully active in its catalytic potential and the Thr 197 phosphate does not turn over readily (4). The activation of PKA is achieved by binding of the second messenger cAMP to the R subunit, which consequently induces a conformational change in the R subunit and leads to the dissociation of the holoenzyme into its constituent subunits (1). The free active C subunit can then affect a range of diverse cellular events by phosphorylating an array of cytoplasmic and nuclear protein substrates, including enzymes and transcription factors (5).The effect of ...