Although cyclic nucleotide phosphodiesterases (PDEs) were described soon after the discovery of cAMP, their complexity and functions in signaling is only recently beginning to become fully realized. We now know that at least 100 different PDE proteins degrade cAMP and cGMP in eukaryotes. A complex PDE gene organization and a large number of PDE splicing variants serve to fine-tune cyclic nucleotide signals and contribute to specificity in signaling. Here we review some of the major concepts related to our understanding of PDE function and regulation including: (a) the structure of catalytic and regulatory domains and arrangement in holoenzymes; (b) PDE integration into signaling complexes; (c) the nature and function of negative and positive feedback circuits that have been conserved in PDEs from prokaryotes to human; (d) the emerging association of mutant PDE alleles with inherited diseases; and (e) the role of PDEs in generating subcellular signaling compartments.