A number of properties of homogeneous cyclic 3',5'-AMP (cAMP)-dependent protein kinase from rabbit skeletal muscle were determined. The enzyme is shown to be a tetramer consisting of one regulatory subunit dimer and two catalytic subunit monomers. Skeletal muscle protein kinase interacts with cAMP and MgATP as illustrated in the following equilibrium expression: R2C2 - (MgATP)2 + 2 cAMP in equilibrium R2 - (cAMP)2 + 2C + 2 MgATP. MgATP is shown to decrease the affinity of the enzyme for cAMP and to be necessary for recombination of the subunits. The concentration of the enzyme in tissue relative to that of cAMP is high enough to influence kinetic parameters of the activation process by cAMP. The cumulative effects of MgATP and high enzyme concentration are to increase the apparent activation constant for cAMP so that in vivo the enzyme would not be highly activated under basal conditions but would be greatly stimulated by increases in cAMP concentration. As a result, it is not necessary to invoke the concept of compartmentalization of cAMP to explain how it could regulate protein kinase activity in vivo. Finally, data are presented which indicate that a possible function of the heat-stable protein inhibitor of cAMP-dependent protein kinases may be to suppress the activity of protein kinase due to basal concentrations of cAMP. As such, the inhibitor could indirectly change the amount of cAMP needed to allow expression of protein kinase activity.