The principal finding in this study is that vascular smooth muscle generates a labile relaxing factor that possesses pharmacological and chemical properties that are similar to those of authentic nitric oxide. MDRF was generated by perfusion of endothelium-denuded bovine pulmonary artery as assessed by bioassay. In addition, endothelium-denuded arterial rings that were incubated at 37 degrees C for 24 hr to lower endogenous L-arginine levels relaxed in response to L-arginine but not D-arginine. Freshly mounted, endothelium-denuded arterial rings were not relaxed by L-arginine but did relax in response to the dipeptide L-arginyl-L-alanine. Relaxant responses were accompanied by increases in smooth muscle levels of cyclic GMP and nitrite, and were inhibited by oxyhemoglobin, methylene blue, and NG-nitro-L-arginine. NG-Nitro-L-arginine also caused endothelium-independent contractile responses. Thus, a relaxing factor with the properties of nitric oxide can be generated from vascular smooth muscle.