In Escherichia coli, inorganic orthophosphate regulates cAMP levels by acting at two separate loci. First, adenylyl cyclase activity measured in permeabilized cells of E. coli is substantially stimulated by physiological concentrations of inorganic phosphate. This stimulation does not require the presence of cAMP phosphodiesterase activity. Second, measurements of cAMP phosphodiesterase activity in permeabilized cells show a dose-dependent inhibition of that activity by inorganic orthophosphate. A model is proposed in which inorganic orthophosphate serves as a multifaceted regulator of cAMP levels by both stimulating synthesis and inhibiting degradation of the nucleotide.