The gene cyaB1 from the cyanobacterium Anabaena sp. PCC 7120 codes for a protein consisting of two N-terminal GAF domains (GAF-A and GAF-B), a PAS domain and a class III adenylyl cyclase catalytic domain. The catalytic domain is active as a homodimer, as demonstrated by reconstitution from complementary inactive point mutants. The specific activity of the holoenyzme increased exponentially with time because the product cAMP activated dose dependently and nucleotide specifically (half-maximally at 1 µM), identifying cAMP as a novel GAF domain ligand. Using point mutants of either the GAF-A or GAF-B domain revealed that cAMP activated via the GAF-B domain. We replaced the cyanobacterial GAF domain ensemble in cyaB1 with the tandem GAF-A/GAF-B assemblage from the rat cGMP-stimulated phosphodiesterase type 2, and converted cyaB1 to a cGMP-stimulated adenylyl cyclase. This demonstrated the functional conservation of the GAF domain ensemble since the divergence of bacterial and eukaryotic lineages >2 billion years ago. In cyanobacteria, cyaB1 may act as a cAMP switch to stabilize committed developmental decisions.