A number of hormones and growth factors have been shown to stimulate target cells via second messenger pathways that in turn regulate the phosphorylation of specific nuclear factors. The second messenger cyclic AMP, for example, regulates a striking number of physiologic processes, including intermediary metabolism, cellular proliferation, and neuronal signaling, by altering basic patterns of gene expression. Our understanding of cyclic AMP signaling in the nucleus has expanded considerably over the past decade, owing in large part to the characterization of cyclic AMP–responsive promoter elements, transcription factors that bind them, and signal-dependent coactivators that mediate target gene induction. More importantly, these studies have revealed new insights into biological problems as diverse as biological clocks and long-term memory. The purpose of this review is to describe the components of the cyclic AMP response unit and to analyze how these components cooperate to induce target gene expression in response to hormonal stimulation.