The bioluminescent bacterium Vibrio fischeri initiates a specific, persistent symbiosis in the light organ of the squid Euprymna scolopes. During the early stages of colonization, V. fischeri is exposed to host-derived nitric oxide (NO). Although NO can be both an antimicrobial component of innate immunity and a key signaling molecule in eukaryotes, potential roles in beneficial host-microbe associations have not been described. V. fischeri hnoX encodes a heme NO/oxygen-binding (H-NOX) protein, a member of a family of bacterial NO- and/or O(2)-binding proteins of unknown function. We hypothesized that H-NOX acts as a NO sensor that is involved in regulating symbiosis-related genes early in colonization. Whole-genome expression studies identified 20 genes that were repressed in an NO- and H-NOX-dependent fashion. Ten of these, including hemin-utilization genes, have a promoter with a putative ferric-uptake regulator (Fur) binding site. As predicted, in the presence of NO, wild-type V. fischeri grew more slowly on hemin than a hnoX deletion mutant. Host-colonization studies showed that the hnoX mutant was also 10-fold more efficient in initially colonizing the squid host than the wild type; similarly, in mixed inoculations, it outcompeted the wild-type strain by an average of 16-fold after 24 h. However, the presence of excess hemin or iron reversed this dominance. The advantage of the mutant in colonizing the iron-limited light-organ tissues is caused, at least in part, by its greater ability to acquire host-derived hemin. Our data suggest that V. fischeri normally senses a host-generated NO signal through H-NOX(Vf) and modulates the expression of its iron uptake capacity during the early stages of the light-organ symbiosis.