PDE7 inhibitors regulate pro-inflammatory and immune T-cell functions, and are a potentially novel class of drugs especially useful in the treatment of a wide variety of immune and inflammatory disorders. Starting from our lead family of thioxoquinazolines, we designed, synthesized, and characterized a novel series of thioxoquinazoline derivatives. Many of these compounds showed inhibitory potencies at sub-micromolar levels against the catalytic domain of PDE7A1 and at the micromolar level against PDE4D2. Cell-based studies showed that these compounds not only increased intracellular cAMP levels, but also had interesting anti-inflammatory properties within a therapeutic window. The in silico data predict that these compounds are capable of the crossing the blood-brain barrier. The X-ray crystal structure of the PDE7A1 catalytic domain in complex with compound 15 at a resolution of 2.4 Å demonstrated that hydrophobic interactions at the active site pocket are a key feature. This structure, together with molecular modeling, provides insight into the selectivity of the PDE inhibitors and a template for the discovery of new PDE7 or PDE7/PDE4 dual inhibitors.