It is becoming increasingly apparent that spatial regulation of cell signalling processes is critical to normal cellular function. In this regard, cAMP signalling regulates many pivotal cellular processes and has provided the paradigm for signal compartmentalization. Recent advances show that isoforms of the cAMP-degrading phosphodiesterase-4 (PDE4) family are targeted to discrete signalling complexes. There they sculpt local cAMP gradients that can be detected by genetically encoded cAMP sensors, and gate the activation of spatially localized signalling through sequestered PKA and EPAC sub-populations. Genes for these important regulatory enzymes are linked to schizophrenia, stroke and asthma, thus indicating the therapeutic potential that selective inhibitors could have as anti-inflammatory, anti-depressant and cognitive enhancer agents.