When slices of young rat hippocampus were exposed briefly (2 min) to N-methyl-D-aspartate (NMDA), a rise in the levels of cyclic GMP took place. This response was dependent on NMDA concentration (EC50 approximately 30 microM) and the maximal elevations exceeded the unstimulated levels by 25-fold. The response to 100 microM NMDA was inhibited by two competitive antagonists of the conversion of arginine to nitric oxide, L-NG-methylarginine and L-NG-nitroarginine (IC50 approximately 6 microM and 100 nM respectively). The inhibitions produced by both antagonists were reduced or abolished when the incubation medium was supplemented with L-arginine (100-300 microM). Slices of adult hippocampus produced smaller increases (5-fold) in cyclic GMP levels in response to 100 microM NMDA than those found in the immature tissue, but the response could similarly be inhibited by NG-methylarginine. The results indicate that NMDA receptor activation in the hippocampus induces the generation of nitric oxide from arginine and that this novel intercellular messenger mediates the increases in cyclic GMP levels.