Acetylcholine induced a variable concentration-dependent relaxation of bovine isolated retinal small arteries contracted with PGF2 alpha. The acetylcholine-mediated relaxation was linearly related to the sodium nitroprusside-induced relaxation, suggesting that the endothelium is well preserved in the vessels and that the variable effect of acetylcholine is due to variations in the soluble guanylate-cyclase enzyme activity in the smooth muscle. The vessels became desensitized to acetylcholine by repeated exposures. L-arginine and indomethacin did not abolish the desensitization. The vessels also became desensitized to the direct smooth muscle relaxing effect of sodium nitroprusside, indicating that desensitization to the endothelium-dependent relaxation by acetylcholine is related primarily to the vascular smooth muscle cells. Atropine, methylene blue and removal of endothelium abolished the acetylcholine-induced relaxation completely, whereas indomethacin had no inhibitory action on the acetylcholine-induced relaxation, suggesting that acetylcholine mediates release of EDRF (nitric oxide: NO) through stimulation of muscarinic receptors. Methylene blue contracted endothelium intact retinal arteries but a spontaneous tone was not present in endothelial denuded arteries. This may indicate a basal release of both a contractile factor, e.g. endothelin, and a relaxing factor. NO, form the retinal endothelium. The results demonstrate that endothelial-derived factors may participate in normal as well as pathophysiological regulation of retinal vascular smooth muscle tone.