Specificity of cAMP signalling pathways has shown that the intracellular targeting of the individual components confers a three-dimensional context to the signalling paradigms in which they can exquisitely control the specificity of the outcome of the signal. Pivotal to this paradigm is degradation of cAMP by sequestered PDEs (phosphodiesterases). cAMP rapidly diffuses within cells and, without the action of spatially confined PDE populations, cAMP gradients could not be formed and shaped within cells so as to regulate targeted effector proteins. Of particular importance in regulating compartmentalized cAMP signalling are isoforms of the PDE4 family, which are individually defined by unique N-terminal regions. We have developed and pioneered the concept that a major function of this N-terminal region is to confer intracellular targeting of particular PDE4 isoforms on specific signalling complexes and intracellular locations. The paradigm for this concept developed from our original studies on the PDE4A1 (RD1) isoform. The N-terminal region unique to PDE4A1 consists of two well-defined helical regions separated by a mobile hinge region. Helix-2 provides the core membrane-insertion module, with helix-1 facilitating membrane association and fidelity of targeting in living cells. The irreversible, Ca(2+)-dependent insertion of the N-terminal region of PDE4A1 into membranes provides 'long-term' memory of cell activation.