Nitric oxide (NO*) has been proposed to be a physiological modulator of cell proliferation, able to promote in most cases cell cycle arrest. In this review I explore the molecular basis of this mechanism of action. The modulatory action of NO* on the intracellular concentration of cGMP and the machinery directly involved in the control of cell cycle progression, including the expression and activity of diverse cyclins and cyclin-dependent kinases, their physiological inhibitors, and the master transcriptional regulator retinoblastoma protein, will be discussed. The role of NO* in proliferation mediated by tyrosine kinase receptors such as the epidermal growth factor receptor and downstream signalling pathways will also be considered. Finally, the involvement of NO* in proliferative processes relevant for normal development will be outlined.