Evidence is presented that modulation of the maximum velocity of a particulate low K-m cyclic adenosine 3':5'-monophosphate (cyclic AMP) phosphodiesterase by thyroid hormones is one mechanism for the regulation of the responsiveness of rat epididymal adipocytes to lipolytic agents such as epinephrine and glucagon. Fat cells of propylthiouracil-induced hypothyroid rats are unresponsive to lipolytic agents and the V-max of particulate low K-m cyclic AMP phosphodiesterase of these cells is elevated above normal. In vivo treatment of hypothyroid rats with triiodothyronine restores to control values both the lipolytic response of the fat cells to epinephrine and the V-max of the particulate bound low K-m cyclic AMP phosphodiesterase. No similar correlation is found with the soluble high K-m cyclic AMP phosphodiesterase. The phosphodiesterases of fat cells from normal and hypothyroid rats respond identically in vitro to propylthiouracil, triiodothyronine, methylisobutylxanthine, or theophylline, although the particulate low K-m cyclic AMP phosphodiesterase is inhibited to a greater extent than soluble cyclic guanosine 3':5'-monophosphate phosphodiesterase activity. Protein kinase of fat cells from hypothyroid rats can be stimulated by cyclic AMP to the same total activity as observed in fat cells of normal rats. However, less of the protein kinase in fat cells from hypothyroid rats was in the cyclic AMP-independent form. This shift in the equilibrium of protein kinase forms is consistent with an increased activity of low K-m cyclic AMP phosphodiesterase and probably results from a lowering of the lipolytically significant pool of cyclic AMP.