Cyclic nucleotide phosphodiesterases (PDEs) are the only enzymes that degrade the cyclic nucleotides cAMP and cGMP, and play a key role in modulating the amplitude and duration of the signal delivered by these two key intracellular second messengers. Defects in cyclic nucleotide signalling are known to be involved in several pathologies. As a consequence, PDEs have long been recognized as potential drug targets, and they have been the focus of intense research for the development of therapeutic agents. A number of PDE inhibitors are currently available for the treatment of disease, including obstructive pulmonary disease, erectile dysfunction, and heart failure. However, the performance of these drugs is not always satisfactory, due to a lack of PDE-isoform specificity and their consequent adverse side effects. Recent advances in our understanding of compartmentalised cyclic nucleotide signalling and the role of PDEs in local regulation of cAMP and cGMP signals offers the opportunity for the development of novel strategies for therapeutic intervention that may overcome the current limitation of conventional PDE inhibitors.