The present study demonstrates the existence of tissue transglutaminase in rabbit alveolar macrophages and measures the effects of cigarette smoke extracts on the activity of enzyme partially purified from these cells. The effects of smoke on transglutaminase purified from guinea pig liver are also measured. A water soluble component of gas-phase cigarette smoke inhibits both enzymes in a dose-dependent manner, with a maximum inhibition of 65% occurring at concentrations of smoke as low as 1% in the case of the rabbit enzyme. The chemical oxidant N-chlorosuccinimide mimics the dose-dependent inhibitory effects of cigarette smoke on both enzyme systems. The thiol reducing agent, dithiothreitol, can prevent enzyme inactivation mediated by both smoke and N-chlorosuccinimide. Dithiothreitol is also capable of reversing inactivation mediated by cigarette smoke, but does not reverse inactivation caused by chemical oxidation with N-chlorosuccinimide. These data suggest that cigarette smoke inhibits transglutaminase activity via an oxidative mechanism that may selectively attack the active-site cysteine residue.