Nitric oxide (NO) has been invoked as an important pathogenic factor in a wide range of immunologically mediated diseases. The present study demonstrates that macrophage-derived NO may conversely function to fine tune T cell-mediated inflammation via reversible dephosphorylation of intracellular signaling molecules, which are involved in the control of T cell proliferation. Thus, T cells activated in the presence of alveolar macrophages are unable to proliferate despite expression of IL-2R and secretion of IL-2. This process is reproduced by the NO generator S-nitroso-N-acetylpenicillamine and is inhibitable by the NO synthase inhibitor N G-methyl-l-arginine. Analysis of T cell lysates by immunoprecipitation with specific Abs and subsequent immunoblotting indicated marked reduction of tyrosine phosphorylation of Jak3 and STAT5 mediated by NO. Further studies indicated that NO-mediated T cell suppression was reversible by the guanylate cyclase inhibitors methylene blue and LY-83583 and was reproduced by a cell-permeable analogue of cyclic GMP, implicating guanylate cyclase activation as a key step in the inhibition of T cell activation by NO.