To assess a potential immunoregulatory role of Schwann cells in the peripheral nervous system we examined whether they are able to secrete nitric oxide metabolites. Schwann cells treated with IFN-gamma and TNF-alpha upregulated iNOS-specific mRNA within 12 hr and released nitrite in a time- and dose-dependent manner, reaching a plateau of secretion after 3 days. Nitrite secretion was inhibited by NMMA, suggesting that Schwann cells are endowed with a cytokine-inducible NO synthase. TGF-beta and IL-1 failed to modulate nitrite release. When assessing their role as APC, we note that Schwann cells activated CD4+ antigen-specific T-cell lines, but in contrast to professional thymic APC this ability declined markedly after Day 1. Theoretically diminished T-cell proliferation and finally death might be achieved by secretion of nitric oxide metabolites by Schwann cells. Inhibition of NO production by NMMA did not restore T-cell proliferation after Day 2 or prevent apoptosis of T-cells. However, in a coculture model Schwann cells exerted a strong suppressive effect on T-cell activation by thymic APC, which was almost completely abrogated by addition of NMMA. We suggest that Schwann cells may exert potent immunoregulatory functions beyond their role as APC. They may terminate immunoinflammatory reactions in the peripheral nervous system by releasing NO.