The cyclic nucleotide second messengers cAMP and cGMP each affect virtually all cellular processes. Although these hydrophilic small molecules readily diffuse throughout cells, it is remarkable that their ability to activate their multiple intracellular effectors is spatially and temporally selective. Studies have identified a critical role for compartmentation of the enzymes which hydrolyse and metabolically inactivate these second messengers, the PDEs (cyclic nucleotide phosphodiesterases), in this specificity. In the present article, we describe several examples from our work in which compartmentation of selected cAMP- or cGMP-hydrolysing PDEs co-ordinate selective activation of cyclic nucleotide effectors, and, as a result, selectively affect cellular functions. It is our belief that therapeutic strategies aimed at targeting PDEs within these compartments will allow greater selectivity than those directed at inhibiting these enzymes throughout the cells.