The distribution of cyclic-AMP phosphodiesterase was investigated in subcellular fractions prepared from homogenates of rat liver or isolated hepatocytes. When measured at 1 mM or 1 microM substrate concentration, approx. 35% or 50%, respectively, of enzyme activity was particulate. The soluble activity appeared to be predominantly a 'high Km' form, whereas the particulate activity had both 'high Km' and 'low Km' components. The recovery of cyclic-AMP phosphodiesterase was measured using 1 microM substrate concentraiton, in plasma membrane-containing fractions prepared either by centrifugation or by the use of specific immunoadsorbents. The recovery of phosphodiesterase was lower than that of marker enzymes for plasma membrane, and comparable with the recovery of markers for intracellular membranes. It was concluded that regulation of both 'high Km' and 'low Km' phosphodiesterase could potentially make a significant contribution to the control of cyclic AMP concentration, even at microM levels, in the liver. the 'low Km' enzyme, for which activation by hormones has been previously described, appears to be located predominantly in intracellular membranes in hepatocytes. The immunological procedure for membrane isolation allowed the rapid preparation of plasma membranes in high yield. Liver cells were incubated with rabbit anti-(rat erythrocyte) serum and homogenized. The antibody-coated membrane fragments were then extracted onto an immunoadsorbent consisting of sheep anti-(rabbit IgG) immunoglobulin covalently bound to aminocellulose. Plasma membrane was obtained in approx. 40% yield within 50 min of homogenizing cells.