The anticonvulsant carbamazepine is an effective treatment both for epilepsy and for bipolar affective disorder, but the molecular mechanism(s) underlying its therapeutic effects have not been identified. We have found that carbamazepine exerts significant inhibitory effects on the cyclic AMP (cAMP) generating system. Within the clinical therapeutic range (∼50 µM), carbamazepine inhibited both basal and forskolin‐stimulated cAMP production, without having any significant effects on phosphodiesterase activity. Carbamazepine also exerted its inhibitory effects on the cAMP generating system in pertussis toxin‐treated cells, suggesting that the action of carbamazepine was likely mediated through an inhibitory guanine nucleotide binding protein‐independent mechanism. A forskolin affinity purification column was used to purify adenylyl cyclases from rat cerebral cortex, and we found that carbamazepine inhibited both basal and forskolin‐stimulated activity of purified adenylyl cyclase. We also investigated the effects of carbamazepine on the levels of the transcription factor, cAMP response element binding protein in the phosphorylated (active) state, and found that carbamazepine significantly inhibited forskolin‐induced phosphorylation of the cAMP response element binding protein. The data indicate that carbamazepine inhibits adenylyl cyclase activity as well as the downstream effects of activation of adenylyl cyclase.