The second messenger cAMP plays a critical role in regulating immune responses. Although well known for its immunosuppressive effect, cAMP is also required for the development of optimal immune responses. Thus, the regulation of this second messenger needs to be finely tuned and well balanced in a context dependent manner. To further understand the role of cAMP synthesis in the functions of the immune system, we focus on a specific adenylyl cyclase (AC) isoform, AC VII (AC7), which is highly expressed in the immune system. We show that mice deficient of AC7 are hypersensitive to LPS-induced endotoxic shock. Macrophages from AC7-deficient mice produce more of the proinflammatory cytokine, TNF-alpha, in response to LPS. The inability to generate intracellular cAMP response to serum factors, such as lysophosphatidic acid, is a potential cause for this phenotype. Thus, AC7 functions to control the extent of immune responses toward bacterial infection. However, it is also required for the optimal functions of B and T cells during adaptive immune responses. AC7 is the major isoform that regulates cAMP synthesis in both B and T cells. AC7-deficient mice display compromised Ab responses toward both T cell-independent and T cell-dependent Ags. The generation of memory T cells is also reduced. These results are the first to ascribe specific functions to an AC isoform in the immune system and emphasize the importance of cAMP synthesis by this isoform in shaping the immune responses.