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Protein kinase inhibitor (PKI) is a potent endogenous inhibitor of the cyclic AMP (cAMP)-dependent protein kinase (PKA). It functions by binding the free catalytic (C) subunit with a high affinity and is also known to export nuclear C subunit to the cytoplasm. The significance of these actions with respect to PKI's physiological role is not well understood. To address this, we have generated by homologous recombination mutant mice that are deficient in PKIalpha, one of the three isoforms of PKI. The mice completely lack PKI activity in skeletal muscle and, surprisingly, show decreased basal and isoproterenol-induced gene expression in muscle. Further examination revealed reduced levels of the phosphorylated (active) form of the transcription factor CREB (cAMP response element binding protein) in the knockouts. This phenomenon stems, at least in part, from lower basal PKA activity levels in the mutants, arising from a compensatory increase in the level of the RIalpha subunit of PKA. The deficit in gene induction, however, is not easily explained by current models of PKI function and suggests that PKI may play an as yet undescribed role in PKA signaling.