Measurements were made of adenyl cyclase, cyclic AMP phosphodiesterase and cyclic AMP in normal and streptozotocin diabetic rat hearts and of cyclic AMP from both rat heart and liver in anti-insulin treated rats. There was no significant change in adenyl cyclase activity in streptozotocin diabetic or insulin treated diabetic hearts, but diabetes significantly lowered the cyclic AMP phosphodiesterase activity. Injection of insulin did not have any effect on normal heart cyclic AMP phosphodiesterase activity but it restored the diabetic activity to normal. Liver, but not heart cyclic AMP was significantly increased in streptozotocin diabetes or after treatment with anti-insulin serum. The increase in cyclic AMP phosphodiesterase may be one of the primary ways in which insulin exerts its action on heart muscle.