Figure 1. Overall adenylyl cyclase catalyzed reaction of cAMP and pyrophosphate (PPi) from ATP.

Figure 2. Gsa activation of adenylyl cyclase, increasing the intracellular concentration of cAMP.

 Adenylyl cyclase (AC) catalyzes the conversion of ATP to 3',5'-cAMP (cyclic adenosine monophosphate) and pyrophosphate (Figure 1). AC is also known by other common names such as adenylate cyclase and 3',5'-cAMP synthetase. AC exists in most cells as a transmembrane protein, but is also found in soluble form in the cytoplasm of some cell types and unicellular organisms. AC acts as a signal converter as it receives signals from hormones and other molecules that ultimately activate it to catalyze the formation of 3',5'-cAMP, an important second messenger in signal transduction pathways. The signal that AC helps to transduce comes from various extracellular stimuli that bind to and activate membrane associated G-proteins. 
Most forms of AC are regulated by G-proteins. Stimulation of AC activity leads to increased intracellular concentration of 3',5'-cAMP, and inhibition decreases 3',5'-cAMP production (Figs. 1 and 2). 3',5'-cAMP then relays the signal to the interior of the cell where many cellular metabolic processes are effected.

(see My Adenylyl Cyclase Minireview for more detail and referencing)