The recent discovery of Epac, a novel cAMP receptor protein, opens up a new dimension in studying cAMP-mediated cell signaling. It is conceivable that many of the cAMP functions previously attributed to cAMP-dependent protein kinase (PKA) are in fact also Epac-dependent. The finding of an additional intracellular cAMP receptor provides an opportunity to further dissect the divergent roles that cAMP exerts in different cell types. In this study, we probed cross-talk between cAMP signaling and the phosphatidylinositol 3-kinase/PKB pathways. Specifically, we examined the modulatory effects of cAMP on PKB activity by monitoring the specific roles that Epac and PKA play individually in regulating PKB activity. Our study suggests a complex regulatory scheme in which Epac and PKA mediate the opposing effects of cAMP on PKB regulation. Activation of Epac leads to a phosphatidylinositol 3-kinase-dependent PKB activation, while stimulation of PKA inhibits PKB activity. Furthermore, activation of PKB by Epac requires the proper subcellular targeting of Epac. The opposing effects of Epac and PKA on PKB activation provide a potential mechanism for the cell type-specific differential effects of cAMP. It is proposed that the net outcome of cAMP signaling is dependent upon the dynamic abundance and distribution of intracellular Epac and PKA.