In addition to its emerging immunodulatory properties, theophylline is a bronchodilator and also decreases mean pulmonary arterial pressure in vivo. The mechanism of action of this drug remains controversial; adenosine antagonism, phosphodiesterase (PDE) inhibition and other actions have been advanced to explain its effectiveness in asthma. Cyclic adenosine monophosphate (AMP) and cyclic guanosine monophosphate (GMP) are involved in the regulation of smooth muscle tone, and the breakdown of these nucleotides is catalysed by multiple PDE isoenzymes. The PDE isoenzymes present in human bronchus and pulmonary artery have been identified, and the pharmacological actions of inhibitors of these enzymes have been investigated. Human bronchus and pulmonary arteries are relaxed by theophylline and by selective inhibitors of PDE III, while PDE IV inhibitors also relax precontracted bronchus and PDE V/I inhibitors relax pulmonary artery. There appears to be some synergy between inhibitors of PDE III and PDE IV in relaxing bronchus, and a pronounced synergy between PDE III and PDE V inhibitors in relaxing pulmonary artery. In neither tissue does 8-phenyltheophylline, a xanthine exhibiting adenosine antagonism but not PDE inhibition, cause any significant relaxation, implying that theophylline does not exert its actions through adenosine antagonism. The close correspondence of theophylline concentrations inhibiting bronchus or pulmonary artery PDE and those causing relaxation points towards PDE inhibition as the major mechanism of action of theophylline in smooth muscle relaxation.