The expression of a constitutively activated Gs alpha protein in the rat thyroid cell line FRTL-5 causes an increase in the hormone-independent adenylyl cyclase activity and promotes TSH-independent growth of the cells. In spite of the constitutive activation of the adenylyl cyclase, the basal cAMP levels in these cells are only marginally increased. To define the role of phosphodiesterases (PDEs) in the genesis of this phenotype, cyclic nucleotide hydrolysis was determined in two cell lines expressing a mutated Gs alpha (Q227L). In these cells, the hydrolysis of both cAMP and cGMP was markedly increased in comparison with normal cells. This increase is the result of the activation of different forms of PDEs. Analysis of the cGMP hydrolysis and Ca++/calmodulin stimulation of the PDE activity indicated that the activity of a Ca++/calmodulin-stimulated PDE is increased in both cell lines. In addition, an increase in high-affinity, rolipram-sensitive cAMP-PDE activity was associated in both cell lines with the appearance of a 67-68 kilodalton (kDa) protein that cross-reacts with two antibodies against cAMP-PDEs. This form had the properties of ratPDE3.2/PDE4D2, a cAMP-PDE that is inducible by TSH in wild type cells. That an increase in cAMP-specific, rolipram-sensitive PDE plays a role in the phenotype induced by Q227L Gs alpha was confirmed by measurements of the mitogenic activity. Incubation with rolipram, which had no effect on wild type cells, caused an increase in cAMP levels and further stimulated TSH-independent proliferation in both cell lines carrying the mutation.(ABSTRACT TRUNCATED AT 250 WORDS)