Patients with genetic defects of the cyclic (c) adenosine-monophosphate (AMP)-signaling pathway and those with neonatal-onset multisystem inflammatory disease (NOMID) develop tumor-like lesions of the long bones. The molecular basis of this similarity is unknown. NOMID is caused by inappropriate caspase-1 activity, which in turn activates the inflammasome. The present study demonstrates that NOMID bone lesions are derived from the same osteoblast progenitor cells that form fibroblastoid tumors in mice and humans with defects that lead to increased cAMP-dependent protein kinase A (PKA) signaling. NOMID tumor cells showed high PKA activity, and an increase in their cAMP signaling led to PKA-specific activation of caspase-1. Increased PKA led to inflammation-independent activation of caspase-1 via over-expression of the proto-oncogene (and early osteoblast factor) Ets-1. In NOMID tumor cells, as in cells with defective PKA regulation, increased prostaglandin E2 (PGE2) led to increased cAMP levels and activation of Wnt signaling, like in other states of inappropriate PKA activity. Caspase-1 and PGE2 inhibition led to a decrease in cell proliferation of both NOMID and cells with abnormal PKA. These data reveal a previously unsuspected link between abnormal cAMP signaling and defective regulation of the inflammasome and suggest that caspase-1 and PGE2 inhibition may be therapeutic targets in bone lesions associated with defects of these two pathways.