Subtle elevations in cAMP localized to the plasma membrane intensely strengthen endothelial barrier function. Paradoxically, pathogenic bacteria insert adenylyl cyclases (ACs) into eukaryotic cells generating a time-dependent cytosolic cAMP-increase that disrupts rather than strengthens the endothelial barrier. These findings bring into question whether membrane versus cytosolic AC activity dominates in control of cell adhesion. To address this problem, a mammalian forskolin-sensitive soluble AC (sACI/II) was expressed in pulmonary microvascular endothelial cells. Forskolin stimulated this sACI/II construct generating a small cytosolic cAMP-pool that was not regulated by phosphodiesterases or Galphas. Whereas forskolin simultaneously activated the sACI/II construct and endogenous transmembrane ACs, the modest sACI/II activity overwhelmed the barrier protective effects of plasma membrane activity to induce endothelial gap formation. Retargeting sACI/II to the plasma membrane retained AC activity but protected the endothelial cell barrier. These findings demonstrate for the first time that the intracellular location of cAMP synthesis critically determines its physiological outcome.