Nitric oxide (NO) is a membrane-permeant signaling molecule which activates soluble guanylyl cyclase and leads to the formation of cyclic GMP (cGMP). The NO/cGMP signaling system is thought to play essential roles during the development of vertebrate and invertebrate animals. Here, we analyzed the cellular expression of this signaling pathway during the development of the Drosophila melanogaster nervous system. Using NADPH diaphorase histochemistry as a marker for NO synthase, we identified several neuronal and glial cell types as potential NO donor cells. To label NO-responsive target cells, we used the detection of cGMP by an immunocytochemical technique. Incubation of tissue in an NO donor induced cGMP immunoreactivity (cGMP-IR) in individual motoneurons, sensory neurons, and groups of interneurons of the brain and ventral nerve cord. A dynamic pattern of the cellular expression of NADPHd staining and cGMP-IR was observed during embryonic, larval, and prepupal phases. The expression of NADPH diaphorase and cGMP-IR in distinct neuronal populations of the larval central nervous system (CNS) indicates a role of NO in transcellular signaling within the CNS and as potential retrograde messenger across the neuromuscular junction. In addition, the presence of NADPH diaphorase-positive imaginal discs containing NO-responsive sensory neurons suggests that a transcellular NO/cGMP messenger system can operate between cells of epithelial and neuronal phenotype. The discrete cellular resolution of donor and NO-responsive target cells in identifiable cell types will facilitate the genetic, pharmacological, and physiological analysis of NO/cGMP signal transduction in the developing nervous system of Drosophila.