PDE4A7 is an isoform encoded by the human PDE4A cAMP-specific phosphodiesterase gene that fails to hydrolyse cAMP and whose transcripts are widely expressed. Removal of either the N- or C-terminal unique portions of PDE4A7 did not reconstitute catalytic activity, showing that they did not exert a chronic inhibitory effect. A chimera (Hyb2), formed by swapping the unique N-terminal portion of PDE4A7 with that of the active PDE4A4C form, was not catalytically active. However, one formed (Hyb1) by swapping the unique C-terminal portion of PDE4A7 with that common to all active PDE4 isoforms was catalytically active. Compared with the active PDE4A4B isoform, Hyb1 exhibited a similar K(m) value for cAMP and IC50 value for rolipram inhibition, but was less sensitive to inhibition by Ro-20-1724 and denbufylline, and considerably more sensitive to thermal denaturation. The unique C-terminal region of PDE4A7 was unable to support an active catalytic unit, whereas its unique N-terminal region can. The N-terminal portion of the PDE4 catalytic unit is essential for catalytic activity and can be supplied by either highly conserved sequence found in active PDE4 isoforms from all four PDE4 subfamilies or the unique N-terminal portion of PDE4A7. A discrete portion of the conserved C-terminal region in active PDE4A isoforms underpins their aberrant migration on SDS/PAGE. Unlike active PDE4A isoforms, PDE4A7 is exclusively localized to the P1 particulate fraction in cells. A region located within the C-terminal portion of active PDE4 isoforms prevents such exclusive targeting. Three functional regions in PDE4A isoforms are identified, which influence catalytic activity, subcellular targeting and conformational status.