Adenosine 3’,5’-monophosphate (cAMP) is a chemoattractant in Dictyostelium discoideum; it also induces phosphodiesterase activity. Recently it was shown that N’-(aminohexyl)adenosine 3’,5’-monophosphate (hexyl-cAMP) effectively induced phosphodiesterase activity, while this compound was chemotactically inactive and did not effectively bind to the cell surface receptor for cAMP. It was suggested that hexyl-cAMP and cAMP induce phosphodiesterase activity via a chemoreceptor-independent mechanism. In another recent report investigation of induction of phosphodiesterase by several cAMP derivatives revealed that phosphodiesterase induction and chemotaxis had similar cyclic nucleotide specificity. Based on this result it was suggested that cAMP induces phosphodiesterase activity via activation of the chemotactic receptor. In this report we show that hexyl-cAMP transiently inhibits extracellular and cell surface phosphodiesterase. This transient inhibition of the inactivating enzyme and the permanent release of small amounts of cAMP by the cells leads to a transient increase of extracellular cAMP levels. Hexyl-cAMP does not inhibit beef heart phosphodiesterase, and is not degraded by this enzyme. Addition of hexyl-cAMP to a cell suspension containing beef heart phosphodiesterase does not result in an accumulation of extracellular cAMP, and phosphodiesterase induction is absent. We conclude that hexyl-cAMP inhibits phosphodiesterase activity which leads to the accumulation of cAMP; consequently cAMP binds to the chemotactic cAMP receptor resulting in the induction of phosphodiesterase activity.