Many cell types in the kidney express adenosine receptors, and adenosine has multiple effects on renal function. Although adenosine is produced within the kidney by several biochemical reactions, recent studies support a novel mechanism for renal adenosine production, the extracellular cAMP-adenosine pathway. This extracellular cAMP-adenosine pathway is initiated by efflux of cAMP from cells following activation of adenylyl cyclase. Extracellular cAMP is then converted to adenosine by the serial actions of ecto-phosphodiesterase and ecto-5'-nucleotidase. When extracellular cAMP is converted to adenosine near the biophase of cAMP production and efflux, this local extracellular cAMP-adenosine pathway permits tight coupling of the site of adenosine production to the site of adenosine receptors. cAMP in renal compartments may also be formed by tissues/organs remote from the kidney. For example, stimulation of hepatic adenylyl cyclase by the pancreatic hormone glucagon increases circulating cAMP, which is filtered at the glomerulus and concentrated in the tubular lumen as water is extracted from the ultrafiltrate. Conversion of hepatic-derived cAMP to adenosine in the kidney completes a pancreatohepatorenal cAMP-adenosine pathway that may serve as an endocrine link between the pancreas, liver, and kidney.