The interaction between nitric oxide (NO) synthesized in one cell and cytosolic guanylate-cyclase-bound heme located in adjacent target cells to generate the NO-heme adduct of guanylate cyclase represents a novel and widespread signal transduction mechanism that links extracellular stimuli to the biosynthesis of cyclic GMP in target cells. A variety of chemical factors interact with selective extracellular receptors and trigger the biosynthesis of NO from L-arginine. The unique chemistry of NO endows this molecule with the capacity to diffuse rapidly into nearby cells and stimulate cyclic GMP formation. Cyclic GMP acts as a messenger in each cell type to trigger different but complementary cellular responses within a localized environment. This transcellular signaling is a form of rapid intercellular communication allowing the simultaneous local initiation of increased blood flow, inhibition of platelet-induced thrombosis and other cellular functions.