In the course of studies on cyclic nucleotide phosphodiesterase, the need for an assay which was both sensitive and continuous was realized. Most of the methods available for monitoring phosphodiesterase either depend on the use of accessory enzymes, and are accordingly subject to intrinsic limitations, or are not capable of continuously monitoring the enzymatic reaction. The present paper describes a new spectrophotometric assay for cyclic nucleotide phosphotidesterase which is highly reproducible, rapid, simple, and more sensitive than many of the previously published assays for this enzyme. The method is sensitive enough to detect the enzymatic conversion of 75 pmol of CAMP to S-AMP per minute. This assay is based on the fact that the hydrolysis of cyclic nucleotides to the corresponding 5'-phosphate ester by phosphodiesterase makes available an additional titratable proton of the 5'-phosphate group. By incorporating phenol red into the assay mixture, the rate of proton production can be continuously measured by monitoring the decrease in absorbance of the basic chromophore of phenol red at 560 nm. The primary advantages of the spectrophotometric assay described here are: (a) it provides initial velocity measurements, and thus is ideally suited to studying the kinetic properties of partially purified preparations of enzyme, and (b) it does not require the tedious and time-consuming purification of commercially available substrates which is often required when radioisotopic assays are used in detailed kinetic studies. The chief limitations are: (a) the sensitivity is not sufficient to accurately monitor the "low K," enzyme, and (b) the use of the assay to quantitate recoveries throughout extensive purification, where different buffer salts at different pH values are used, would require that the enzyme be dialyzed prior to assay.