Membrane rafts are sphingolipid- and cholesterol-rich microdomains that contain dynamic arrangements of signaling proteins. Notably, various components of the ubiquitous cAMP/Protein Kinase A (PKA) pathway, including β-adrenergic receptors (β-ARs), G proteins, and adenylyl cyclases (ACs), have been shown to localize differentially between membrane rafts and non-raft regions of the plasma membrane. As PKA participates in regulating diverse fundamental cellular functions, a number of which require membrane rafts, it is important to understand how PKA activity is specifically regulated in these membrane microdomains. To this end, we developed an improved FRET-based PKA activity biosensor, and targeted it to both membrane raft and non-raft regions of the plasma membrane to examine PKA activity dynamics in different plasma membrane microdomains. Disruption of membrane rafts via cholesterol depletion was shown to enhance β-AR stimulated PKA activity at the plasma membrane, suggesting that membrane rafts play a negative role in β-AR stimulated PKA activation. Furthermore, we found that membrane rafts possess higher basal PKA activity in the resting state compared to non-raft regions, which depends on the integrity of membrane rafts and proper localization of PKA. This study shows that membrane rafts play an important role in regulating the activity of PKA at the plasma membrane, and demonstrates the ability of live-cell FRET-based assays to reveal dynamic differences amongst plasma membrane microdomains, laying a foundation for further dissection of membrane regulated signal transduction.