Cyclic nucleotides have been implicated in the normal function of macrophages, but the nature of the cyclic nucleotide catabolizing enzyme phosphodiesterase (PDE) and its role in regulation of macrophage function has not been previously reported. Cyclic adenosine monophosphate PDE activity was studied in mouse peritoneal macrophages and found to be similar to that reported in other tissues with regard to stability and divalent cation requirement. Exudate macrophages induced by injection of either endotoxin or proteose peptone broth were found to have reduced PDE activity and enhanced EAC phagocytic capacity and acid phosphatase (AP) activity. When resident peritoneal macrophages were cultured in vitro; AP activity increased over 24 hr and remained elevated for 96 hr. PDE activity declined steadily over 96 hr. This steady decline in PDE activity observed during culture was not altered by inclusion of endotoxin. These studies suggest that PDE activity is reduced in macrophages with maximally enhanced function but does not appear to be significantly altered during early phases of functional change in macrophages.