Analysis of knockout animals indicates that 3',5'cyclic guanosine monophosphate (cGMP) has an important role in gut homeostasis but the signaling mechanism is not known. The goals of this study were to test whether increasing cGMP could affect colon homeostasis and determine the mechanism. We increased cGMP in the gut of Prkg2(+/+) and Prkg2(-/-) mice by treating with the PDE5 inhibitor Vardenafil (IP). Proliferation, differentiation and apoptosis in the colon mucosa were then quantitated. Vardenafil (Vard) treatment increased cGMP in colon mucosa of all mice, but reduced proliferation and apoptosis, and increased differentiation only in Prkg2(+/+) mice. Vard and cGMP treatment also increased dual specificity protein phosphatase 10 (DUSP10) expression and reduced phospho-c-Jun N-terminal kinase (JNK) levels in the colon mucosa of Prkg2(+/+) but not Prkg2(-/-) mice. Treatment of Prkg2(-/-) mice with the JNK inhibitor SP600125 reversed the defective homeostasis observed in these animals. Activation of protein kinase G2 (PKG2) in goblet-like LS174T cells increased DUSP10 expression and reduced JNK activity. PKG2 also increased goblet cell-specific MUC2 expression in LS174T cells, and this process was blocked by DUSP10-specific siRNA. The ability of cGMP signaling to inhibit JNK-induced apoptosis in vivo was demonstrated using dextran sodium sulfate (DSS) to stress the colon epithelium. Vard was a potent inhibitor of DSS-induced epithelial apoptosis, and significantly blocked pathological endpoints in this model of experimental colitis. In conclusion, Vard treatment activates cGMP signaling in the colon epithelium. Increased PKG2 activity alters homeostasis by suppressing proliferation and apoptosis while promoting differentiation. The PKG2-dependent mechanism was shown to involve increased DUSP10 and subsequent inhibition of JNK activity.