We previously showed that ADP-ribosylation (ADP-r) activity of ExoS, a type III secreted toxin of Pseudomonas aeruginosa, enables bacterial replication in corneal and respiratory epithelial cells and correlates with bacterial trafficking to plasma membrane blebs (bleb-niche formation). Here, we explored another type III secreted toxin, ExoY, for its impact on intracellular trafficking and survival, and for virulence in vivo using a murine corneal infection model. Chromosomal or plasmid-mediated expression of exoY in invasive P. aeruginosa (strain PAO1) enabled bacteria to form and traffic to epithelial membrane blebs in the absence of other known effectors. In contrast, plasmid expression of any of four adenylate cyclase mutant forms of exoY did not enable bleb-niche formation, and bacteria localized to perinuclear vacuoles as for effector-null mutant controls. None of the plasmid-complemented bacteria used in this study showed ADP-r activity in the absence of ExoS and ExoT. In contrast to ADP-r activity of ExoS, bleb-niche formation induced by ExoY's adenylate cyclase activity was not accompanied by enhanced intracellular replication. In vivo results showed that ExoY-adenylate cyclase activity promoted P. aeruginosa corneal virulence in susceptible mice. Together the data show that adenylate cyclase activity of P. aeruginosa ExoY, similarly to the ADP-r activity of ExoS, can mediate bleb-niche formation in epithelial cells. While this activity did not promote intracellular replication in vitro, ExoY conferred increased virulence in vivo in susceptible mice. Mechanisms for bleb-niche formation and relationships to intracellular replication and virulence in vivo require further investigation for both ExoS and ExoY.