Arginase II has been shown to be involved in the hypoxia-induced proliferation of human pulmonary artery smooth muscle cells (hPASMCs). The signal transduction pathways responsible for the induction of arginase II are poorly understood. Cyclic AMP is involved in many intracellular processes, and cAMP levels are regulated by a balance between production via adenylate cyclases and degradation via phosphodiesterases. The purpose of this study was to determine the effects of cAMP on hypoxia-induced arginase expression, activity, and proliferation in hPASMCs. We found that the cAMP analog 8-Bromo-cAMP (8-Br-cAMP), the adenylate cyclase activator forskolin, and the phosphodiesterase 3 inhibitor cilostamide prevented the hypoxic induction of arginase II mRNA and protein expression in hPASMCs. The inhibition of arginase II protein was found to be mediated by exchange protein directly activated by cAMP. Arginase activity was decreased by 8-Br-cAMP, as evidenced by significantly lower V(max) for arginase in normoxia and hypoxia. The hypoxia-induced hPASMC proliferation was completely prevented by the addition of 8-Br-cAMP, forskolin, or cilostamide. These data are the first to describe the inhibitory effect of cAMP on arginase activity, expression, and resultant proliferation of hypoxic hPASMCs.