We determined whether inhaling low levels of nitric oxide (NO) gas could selectively reverse hypoxic pulmonary vasoconstriction in the near-term newborn lamb and whether vasodilation would be attenuated by respiratory acidosis. To examine the mechanism of air and NO-induced pulmonary vasodilation soon after birth, we measured plasma and lung cGMP levels in the newly ventilated fetal lamb. Breathing at FIO2 0.10 nearly doubled the pulmonary vascular resistance index in newborn lambs and decreased pulmonary blood flow primarily by reducing left-to-right blood flow through the ductus arteriosus. Inhaling 20 ppm NO at FIO2 0.10 completely reversed hypoxic pulmonary vasoconstriction within minutes. Maximum pulmonary vasodilation occurred during inhalation of > or = 80 ppm NO. Breathing 8% CO2 at FIO2 0.10 elevated the pulmonary vascular resistance index to a level similar to breathing at FIO2 0.10 without added CO2. Respiratory acidosis did not attenuate pulmonary vasodilation by inhaled NO. In none of our studies did inhaling NO produce systemic hypotension or elevate methemoglobin levels. Four minutes after initiating ventilation with air in the fetal lamb lung, cGMP concentration nearly doubled without changing preductal plasma cGMP concentration. Ventilation with 80 ppm NO at FIO2 0.21 increased both lung and preductal plasma cGMP concentration threefold. Our data suggest that inhaled NO gas is a rapid and potent selective vasodilator of the newborn pulmonary circulation with an elevated vascular tone due to hypoxia and respiratory acidosis that acts by increasing lung cGMP concentration.