Many components of cellular signaling pathways are sensitive to regulation by oxidation and reduction. Previously, we described the inactivation of cAMP-dependent protein kinase (PKA) by direct oxidation of a reactive cysteine in the activation loop of the kinase. In the present study, we demonstrate that in HeLa cells PKA activity follows a biphasic response to thiol oxidation. Under mild oxidizing conditions, or short exposure to oxidants, forskolin-stimulated PKA activity is enhanced. This enhancement was blocked by sulfhydryl reducing agents, demonstrating a reversible mode of activation. In contrast, forskolin-stimulated PKA activity is inhibited by more severe oxidizing conditions. Mild oxidation enhanced PKA activity stimulated by forskolin, isoproterenol, or the cell-permeable analog, 8-bromo-cAMP. When cells were lysed in the presence of serine/threonine phosphatase inhibitor, NaF, the PKA-enhancing effect of oxidation was blunted. These results suggest oxidation of a PKA-counteracting phosphatase may be inhibited, thus enhancing the apparent kinase activity. Using an in vivo PKA activity reporter, we demonstrated that mild oxidation does indeed prolong the PKA signal induced by isoproterenol by inhibiting counteracting phosphatase activity. The results of this study demonstrate in live cells a unique synergistic mechanism whereby the PKA signaling pathway is enhanced in an apparent biphasic manner.