Nitric oxide (NO) may play an important role in regulating airway function and in the pathophysiology of inflammatory airway diseases. Endothelium-derived NO may be important in regulating airway blood flow and, indirectly, plasma exudation. NO is the neurotransmitter of bronchodilator nerves in human airways and counteracts the bronchoconstriction due to cholinergic neural mechanisms. Inducible NO synthase (iNOS) is expressed in human epithelial cells in response to pro-inflammatory cytokines and oxidants, probably via activation of the transcription factor nuclear factor kappa B (NF-kappa B). There is increased expression of iNOS in the epithelium of asthmatic patients and in lung macrophages in bronchiectasis. This may account for the increased concentration of NO in the exhaled air of patients with inflammatory airways disease. Increased NO production in the airways may result in hyperaemia, plasma exudation, mucus secretion and indirectly increased proliferation of Th2 lymphocytes responsible for eosinophilic inflammation. Glucocorticoids inhibit the induction of iNOS in epithelial cells and reduce the elevated exhaled NO to normal values. Selective inhibitors of iNOS may be useful in the treatment of inflammatory airway diseases, such as asthma, in the future.