Increasing evidence indicates that T cell-dependent, interferon gamma (IFN gamma)-induced activation of murine macrophages and nitric oxide (NO) production plays an important role in host defenses against many microorganisms. A role for this mechanism in pulmonary defenses against infectious agents has not been examined. Previous studies demonstrated that both CD4 and CD8 T cells were required for lung clearance of encapsulated Cryptococcus neoformans (Cne). The current studies investigated whether IFN gamma-induced NO production was involved in the protective T cell-mediated immune response against Cne. Intratracheal inoculation of a low-virulence strain of Cne into mice resulted in an infection that was progressively cleared in immunocompetent C.B-17, but not severe combined immunodeficient (SCID) mice. The onset of Cne lung clearance in immunocompetent mice coincided with a marked increase in inflammatory cells in the lung, local expression of IFN gamma-inducible nitric oxide synthase (iNOS) messenger RNA (mRNA), and an increase in systemic NO production as measured by urinary nitrate excretion. None of these changes were observed in infected SCID mice. Inflammatory lung cells isolated from Cne-infected C.B-17 mice inhibited the growth of endogenous Cne in vitro by a NO-dependent mechanism. Moreover, lung clearance of Cne in immunocompetent mice was blocked by treatment with (1) antibody to IFN gamma, which blocked iNOS gene expression and NO production, or (2) the arginine analogue, NGmonomethyl-L-arginine (MMA), which only blocked NO production. However, neither anti-IFN gamma nor MMA treatment decreased the numbers or types of recruited inflammatory cells. Thus, these studies demonstrated that, although recruitment of effector cells was required, it was not sufficient to initiate clearance of Cne from the lung. Rather, an IFN gamma-induced effector mechanism, i.e., NO production, was also required.