The adenylyl cyclase Cyr1 plays a pivotal role in regulating virulence traits in the human fungal pathogen Candida albicans. Although a diverse range of signals are known to activate Cyr1, it remains unclear how low activity is maintained in the absence of stimuli. To uncover negative regulatory elements, we designed a genetic screen to identify mutations in Cyr1 that increase its catalytic activity. We found such a mutant carrying a single Glu1541 to Lys substitution in a conserved motif C-terminal to the catalytic domain. This E1541K mutation caused constitutive filamentous growth, hypersensitivity to stress, resistance to farnesol and overproduction of riboflavin. The mutant phenotype depends on Cap1 and Ras1, two known positive regulators of Cyr1, and the filamentous growth requires Hgc1, a key promoter of hyphal growth. Strikingly, expressing a truncated version of the mutant protein lacking the entire region N-terminal to the catalytic domain in cyr1Δ cells caused a fivefold increase in the cellular cAMP level. Such cells exhibited dramatic enlargement, cytokinetic defects, G1 arrest and impaired hyphal development. Thus, our studies have revealed novel regulatory elements in Cyr1 that normally repress Cyr1 activity to prevent the toxicity of unregulated high cAMP levels.