Cyclic AMP-dependent protein kinase (cAMP-PK) is a ubiquitous enzyme that, when activated by cAMP, is capable of phosphorylating a variety of intracellular proteins. The central postulate of cAMP-mediated hormone action is that hormones regulate intracellular cAMP concentration and cAMP-PK mediates the effects of this second messenger. Although this postulate accurately describes cAMP action in certain systems, it does not adequately provide for recent observations of the accumulation of cAMP and the activation of protein kinase without the anticipated effects on protein kinase's substrates. Both biochemical and cytochemical technics provide evidence that hormonally-specific regulation of cAMP action occurs and is important. Our thesis is that hormonal regulation of metabolic events via cAMP is localized intracellular phenomenon. We propose that occupation of some cell-surface hormone receptors leads to cAMP accumulation and the activation of protein kinase in subcellular compartments, with the consequent phosphorylation of specific, rather than all, substrates of protein kinase. circumstances potentially contributing to this specificity include: (a) physical and kinetic compartmentation of hormone-receptor-adenylate cyclase complexes non-randomly within the cell membrane; and, (b) a fixed spatial relationship of hormonally activated adenylate cyclase and specific intracellular regions by the participation of cytoskeletal proteins.