The cAMP-dependent pathway, which regulates yeast-to-hypha morphogenesis in Candida albicans, is controlled by changes in cAMP levels determined by the processes of synthesis and hydrolysis. Both low- and high-affinity cAMP phosphodiesterases are encoded in the C. albicans genome. CaPDE2, encoding the high-affinity cAMP phosphodiesterase, has been cloned and shown to be toxic in Saccharomyces cerevisiae upon overexpression under pGAL1, but functional under the moderate pMET3. Deletion of CaPDE2 causes elevated cAMP levels and responsiveness to exogenous cAMP, higher sensitivity to heat shock, severe growth defects at 42 degrees C and highly reduced levels of EFG1 transcription. In vitro in hypha-inducing liquid medium CaPDE2, deletion prohibits normal hyphal, but not pseudohyphal growth. On solid medium capde2 mutants form aberrant hyphae, with fewer branches and almost no lateral buds, which are deficient in hypha-to-yeast reversion. The phenotypic defects of capde2 mutants show that the cAMP-dependent pathway plays specific roles in hyphal and pseudohyphal development, its regulatory role however, being greater in liquid than on solid medium in vitro. The increased expression of CaPDE2 after serum addition correlates well with a drop in cAMP levels following the initial rise in response to the hyphal inducer. These results suggest that Capde2p mediates a desensitization mechanism by lowering basal cAMP levels in response to environmental stimuli in C. albicans.