The 105,000 X g supernatant fraction of bovine pineal gland contains a phosphodiesterase activity that hydrolyzes both cyclic AMP and cyclic GMP. The rate of hydrolysis is 4-5 times greater with cyclic GMP as substrate than with cyclic AMP. Chromatography of supernatant fraction on Sephadex G-150 resolves phosphodiesterase activity into two fractions designated PDE I and PDE II. These are distinguishable on the basis of their molecular size, substrate specificity, and kinetic parameters. PDE I hydrolyzes cyclic GMP at a faster rate than cyclic AMP and has a molecular weight of 163,000. PDE II appears to be a smaller protein with a molecular weight of 24,400 and is specific for cyclic AMP. PDE I has apparent Km values of 83 and 53 micron for cyclic AMP and cyclic GMP, respectively, whereas PDE II exhibits an apparent Km value of 330 micron for cyclic AMP. With subsaturating concentrations of cyclic AMP as substrate, the phosphodiesterase activity of PDE I is inhibited by the addition of cyclic GMP. However, PDE II activity remains unaffected by cyclic GMP even at concentrations up to 125 micron. PDE II appears to be thermostable, losing only 20% of its activity on heating at 80 degrees for 2 min. Similar treatment completely abolishes the enzyme activity of PDE I.