cAMP is the original second messenger that is synthesized in response to a number of extracellular stimuli. Recent advances in cAMP reporter technology have given an insight into how cAMP signals retain their specificity. Spatial and temporal cAMP dynamics are regulated by discretely positioned phosphodiesterases that act as sinks to create simultaneous, multiple cAMP gradients in many cellular locations. Such gradients are sampled within microdomains that contain anchored cAMP effector proteins. Compartmentalization of proteins that produce, degrade and are activated by cAMP is crucial for the specificity of action required for normal cell function.