The various effects of the phosphodiesterase inhibitor D-4-(3-butoxy-4-methoxybenzyl)-2-imidazolidinone (RO-20-1724) on fat cell metabolism were examined and compared to those obtained with 1-methyl-3-isobutylxanthine (IBMX). Like IBMX, RO-20-1724 increased the rate of lipolysis, suppressed the incorporation of glucose into fat, did not increase the basal rate of cAMP production, but induced fast linear accumulation of the nucleotide when combined with a lipolytic agent. The time scale and the effective concentrations of both reagents in exerting these effects were similar. Both inhibitors were also equally potent in inhibiting the low Michaelis-Menten constant (Km) cAMP phosphodiesterase activity in fat cell homogenate. A fundamental difference between both inhibitors however did exist. Whereas the addition of IBMX abolished the ability of insulin to inhibit lipolysis as previously reported, insulin is fully functional in inhibiting the increased rate of lipolysis in the presence of RO-20-1724. Also, RO-20-1724 does not interfere with the ability of insulin to inhibit fully cholera toxin-mediated lipolysis. It is concluded that under these conditions the antilipolytic effect of insulin may be produced without demonstrable activation of cAMP phosphodiesterase. The effects of the methylxanthines in abolishing insulin action probably relates to interference with insulin-dependent intracellular enzymic activity other than cAMP phosphodiesterase.