A genomic DNA fragment from Saccharomyces cerevisiae which contains the SRA5 (=PDE2) gene, coding for a low Km cAMP-phosphodiesterase, was transfected into Chinese hamster ovary cells. Clones carring the cAMP-phosphodiesterase gene were capable of growth in the presence of cholera toxin, which slows the growth of untransfected cells by elevating their cAMP levels. The cholera toxin-resistant transfected cell lines expressed high levels of cAMP-phosphodiesterase mRNA and cAMP-phosphodiesterase activity. Basal intracellular cAMP levels were not significantly affected by the presence of the yeast cAMP-phosphodiesterase gene, but elevation of cAMP levels in response to cholera toxin or prostaglandin E1 was suppressed. Induction of the cAMP-responsive tyrosine aminotransferase promoter by cholera toxin was also blocked in cell lines carrying the yeast cAMP-phosphodiesterase gene. Cholera toxin-resistant transfected cell lines were sensitive to the growth inhibitory effects of N6,02'-dibutyryladenosine 3',5'-monophosphate, which can be used to bypass the effects of the yeast cAMP-phosphodiesterase.