Spatiotemporal control of the cAMP signaling pathway is governed by both hormonal stimulation of cAMP generation by adenylyl cyclases (activation phase) and cAMP hydrolysis by phosphodiesterases (PDEs) (termination phase). The termination phase is initiated by PDEs actively targeting the protein kinase A (PKA) R-subunit through formation of a PDE-PKAR-cyclic adenosine monophosphate (cAMP) complex (the termination complex). Our results using PDE8 as a model PDE, reveal that PDEs mediate active hydrolysis of cAMP bound to its receptor RIα by enhancing the enzymatic activity. This accelerated cAMP turnover occurs via formation of a stable PDE8-RIα complex, where the protein-protein interface forms peripheral contacts and the central ligand cements this ternary interaction. The basis for enhanced catalysis is active translocation of cAMP from its binding site on RIα to the hydrolysis site on PDE8 through direct “channeling.” Our results reveal cAMP channeling in the PDE8-RIα complex and a molecular description of how this channel facilitates processive hydrolysis of unbound cAMP. Thus, unbound cAMP maintains the PDE8-RIα complex while being hydrolyzed, revealing an undiscovered mode for amplification of PKA activity by cAMP-mediated sequestration of the R-subunit by PDEs. This novel regulatory mode explains the paradox of cAMP signal amplification by accelerated PDE-mediated cAMP turnover. This highlights how target effector proteins of small-molecule ligands can promote enzyme-mediated ligand hydrolysis by scaffolding effects. Enhanced activity of the PDE8-RIα complex facilitates robust desensitization, allowing the cell to respond to dynamic levels of cAMP rather than steady-state levels. The PDE8-RIα complex represents a new class of PDE-based complexes for specific drug discovery targeting the cAMP signaling pathway.