LY195115 selectively inhibited the peak III isozyme of cardiac cyclic nucleotide phosphodiesterase (PDE) eluted from DEAE-cellulose columns. Inhibition curves were biphasic, suggesting heterogeneity within this preparation. Since peak III PDE is reported to be derived from membranes, effects of LY195115 upon PDE associated with cardiac membranes were examined. LY195115-sensitive PDE measured in the various membrane fractions correlated well with the sarcoplasmic reticulum marker Ca2+-ATPase (r = 0.94; p less than 0.001), but not with Na+,K+-ATPase or azide-sensitive ATPase. Membrane disruption failed to reveal latent LY195115-sensitive PDE in sarcolemmal vesicles known to be primarily right side out. The results suggest that LY195115-sensitive PDE is located within sarcoplasmic reticulum membranes with a distribution similar or identical to that of Ca2+-ATPase. Accordingly, LY195115-sensitive PDE was referred to as SR-PDE. A subfraction of sarcoplasmic reticulum vesicles (free SR vesicles) was sufficiently homogeneous with respect to SR-PDE activity to carry out steady state kinetic studies. Double reciprocal plots of cAMP hydrolysis were linear, yielding Km and Vmax values of 0.46 +/- 0.03 microM and 700 +/- 90 pmol/min/mg of vesicle protein, respectively. LY195115 was a linear competitive inhibitor of SR-PDE with a Ki of 80 +/- 10 nM. -LogIC50 values for inhibition of SR-PDE by a series of structural analogues of LY195115 correlated highly with published -logED50 values for stimulation of cardiac contractility in vivo (r = 0.91, p less than 0.001). Consequently, in vivo effects of LY195115 upon the heart appear to result primarily from competitive inhibition of SR-PDE, or from binding to a site with a topography similar or identical to that of the catalytic site of SR-PDE.