Phosphodiesterase catalyzes the hydrolysis of the intracellular second messenger 3',5'-cyclic AMP (cAMP) into the corresponding 5'-nucleotide. Phosphodiesterase 4 (PDE4), the major cAMP-specific PDE in inflammatory and immune cells, is an attractive target for the treatment of asthma and COPD. We have determined crystal structures of the catalytic domain of PDE4B complexed with AMP (2.0 A), 8-Br-AMP (2.13 A) and the potent inhibitor rolipram (2.0 A). All the ligands bind in the same hydrophobic pocket and can interact directly with the active site metal ions. The identity of these metal ions was examined using X-ray anomalous difference data. The structure of the AMP complex confirms the location of the catalytic site and allowed us to speculate about the detailed mechanism of catalysis. The high-resolution structures provided the experimental insight into the nucleotide selectivity of phosphodiesterase. 8-Br-AMP binds in the syn conformation to the enzyme and demonstrates an alternative nucleotide-binding mode. Rolipram occupies much of the AMP-binding site and forms two hydrogen bonds with Gln443 similar to the nucleotides.