We have shown that ethanol induces translocation of cAMP-dependent protein kinase (PKA) to the nucleus, cAMP response element-binding protein (CREB) phosphorylation, and cAMP response element-mediated gene transcription in NG108-15 cells. However, little is known about which PKA types regulate this process. We show here that under basal conditions NG108-15 cells contain type I PKA (CbetaRIbeta) primarily in cytosol and type II PKA (CalphaRIIbeta) in the particulate and nuclear fractions. Antagonists of both type I and type II PKA inhibit forskolin- and ethanol-induced cAMP response element-mediated gene transcription. However, only the type II PKA antagonist inhibits forskolin-induced Calpha and ethanol-induced Calpha and RIIbeta translocation to the nucleus and CREB phosphorylation; the type I antagonist is without effect. Our data suggest that forskolin- and ethanol-induced CREB phosphorylation and gene activation are differentially mediated by the two types of PKA. We propose that type II PKA is translocated and activated in the nucleus and induces CREB phosphorylation that is necessary but not sufficient for gene transcription. By contrast, type I PKA is activated in the cytoplasm, turning on a downstream pathway that activates other transcription cofactors that interact with phosphorylated CREB to induce gene transcription.