Cyclic 3′,5′-guanylyl and adenylyl nucleotides function as second messengers in eukaryotic signal transduction pathways and as sensory transducers in prokaryotes. The nucleotidyl cyclases (NCs) that catalyze the synthesis of these molecules comprise several evolutionarily distinct groups, of which class III is the largest. The domain structures of prokaryotic and eukaryotic class III NCs are diverse, including a variety of regulatory and transmembrane modules. Yet all members of this family contain one or two catalytic domains, characterized by an evolutionarily ancient topological motif (βααββαβ) that is preserved in several other enzymes that catalyze the nucleophilic attack of a 3′-hydroxyl upon a 5′ nucleotide phosphate. Two dyad-related catalytic domains compose one catalytic unit, with the catalytic sites formed at the domain interface. The catalytic domains of mononucleotidyl cyclases (MNCs) and diguanylate cyclases (DGCs) are called cyclase homology domains (CHDs) and GGDEF domains, respectively. Prokaryotic NCs usually contain only one catalytic domain and are catalytically active as intermolecular homodimers. The different modes of dimerization in class III NCs probably evolved concurrently with their mode of binding substrate. The catalytic mechanism of GGDEF domain homodimers is not completely understood, but they are expected to have a single active site with each subunit contributing equivalent determinants to bind one GTP molecule or half a c-diGMP molecule. CHD dimers have two potential dyad-related active sites, with both CHDs contributing determinants to each site. Homodimeric class III MNCs have two equivalent catalytic sites, although such enzymes may show half-of-sites reactivity. Eukaryotic class III MNCs often contain two divergent CHDs, with only one catalytically competent site. All CHDs appear to use a common catalytic mechanism, which requires the participation of two magnesium or manganese ions for binding polyphosphate groups and nucleophile activation. In contrast, mechanisms for purine recognition and specificity are more diverse. Class III NCs are subject to regulation by small molecule effectors, endogenous domains, or exogenous protein partners. Many of these regulators act by altering the interface of the catalytic domains and therefore the integrity of the catalytic site(s). This review focuses on both conserved and divergent mechanisms of class III NC function and regulation.