Millions of people regularly obtain insufficient sleep. Given the effect of sleep deprivation on our lives, understanding the cellular and molecular pathways affected by sleep deprivation is clearly of social and clinical importance. One of the major effects of sleep deprivation on the brain is to produce memory deficits in learning models that are dependent on the hippocampus. Here we have identified a molecular mechanism by which brief sleep deprivation alters hippocampal function. Sleep deprivation selectively impaired 3', 5'-cyclic AMP (cAMP)- and protein kinase A (PKA)-dependent forms of synaptic plasticity in the mouse hippocampus, reduced cAMP signalling, and increased activity and protein levels of phosphodiesterase 4 (PDE4), an enzyme that degrades cAMP. Treatment of mice with phosphodiesterase inhibitors rescued the sleep-deprivation-induced deficits in cAMP signalling, synaptic plasticity and hippocampus-dependent memory. These findings demonstrate that brief sleep deprivation disrupts hippocampal function by interfering with cAMP signalling through increased PDE4 activity. Thus, drugs that enhance cAMP signalling may provide a new therapeutic approach to counteract the cognitive effects of sleep deprivation.