Aims: Cyclic adenosine monophosphate (cAMP) regulates cardiac excitation-contraction coupling by acting in microdomains associated with sarcolemmal ion channels. However, local real time cAMP dynamics in such microdomains has not been visualized before. We sought to directly monitor cAMP in a microdomain formed around sodium-potassium ATPase (NKA) in healthy and failing cardiomyocytes and to better understand alterations of cAMP compartmentation in heart failure. Methods and Results: A novel Förster resonance energy transfer (FRET)-based biosensor termed PLM-Epac1 was developed by fusing a highly sensitive cAMP sensor Epac1-camps to the C-terminus of phospholemman (PLM). Live cell imaging in PLM-Epac1 and Epac1-camps expressing adult rat ventricular myocytes revealed extensive regulation of NKA/PLM microdomain associated cAMP levels by β2-adrenoceptors (β2-ARs). Local cAMP pools stimulated by these receptors were tightly controlled by phosphodiesterase (PDE) type 3. In chronic heart failure following myocardial infarction, dramatic reduction of the microdomain-specific β2-AR/cAMP signals and β2-AR dependent PLM phosphorylation was accompanied by a pronounced loss of local PDE3 and an increase in PDE2 effects. Conclusions: NKA/PLM complex forms a distinct cAMP microdomain which is directly regulated by β2-ARs and is under predominant control by PDE3. In heart failure, local changes in PDE repertoire result in blunted β2-AR signaling to cAMP in the vicinity of PLM.