The effect of hydrocortisone on cAMP phosphodiesterase activity in human lymphocytes and beef heart extract was investigated. At all substrate concentrations tested, inhibition of phosphodiesterase activity was demonstrated when both physiological and pharmacological concentrations of hydrocortisone were used (1.4 × 10-3M to 1.4 × 10-7M). Inhibition of phosphodiesterase activity by hydrocortisone was regularly observed in reaction mixtures which contained only phosphodiesterase purified from beef heart and the reagents used for phosphodiesterase assay. Thus, it appears that inhibition of activity of the enzyme may be a direct action of the steroid and independent of effects on other cytoplasmic or nuclear constituents of the cell. One of the mechanisms of action of glucocorticoid hormones on cells appears to be regulation of cAMP metabolism through a direct action of the hormone on phosphodiesterase activity. 1 This work was supported in part by USPHS Grants AM15853 and HD6779.