cAMP acts by

Cyclic AMP is formed from ATP by the action of the enzyme adenylyl cyclase and conveed to physiologically inactive 5&;AMP by the action of the enzyme phosphodiesterase. Some of the phosphodiesterase isoforms that break down cAMP are inhibited by methylxanthines such as caffeine and theophylline. Consequently, these compounds can augment hormonal and transmitter effects mediated cAMP. Cyclic AMP activates one of the cyclic nucleotide-dependent protein kinases (protein kinase A, PKA) that, like protein kinase C, catalyzes the phosphorylation of proteins, changing their conformation and altering their activity. In addition, the active catalytic subunit of PKA moves to the nucleus and phosphorylates the cAMP-responsive element-binding protein (CREB). This transcription factor then binds to DNA and alters transcription of a number of genes.Ref: Ganong&;s review of medical physiology, 23rd edition, Page no: 56