Procytokine processing by caspase-1 is required for the maturation and release of IL-1beta and IFN-gamma-inducing factor (IGIF) (or IL-18) from activated macrophages (Mphi). Nitric oxide (NO) has emerged as a potent inhibitor of cysteine proteases. Here, we tested the hypothesis that NO regulates cytokine release by inhibiting IL-1beta-converting enzyme (ICE) or caspase-1 activity. Activated RAW264.7 cells released four to five times more IL-1beta, but not TNF-alpha, in the presence of the NO synthase inhibitor N(G)-monomethyl-L-arginine. Stimulated peritoneal Mphi from wild-type mice (inducible NO synthase (iNOS)+/+) also released more IL-1beta if exposed to N(G)-monomethyl-L-arginine, whereas Mphi from iNOS knockout mice (iNOS-/-) did not. Inhibition of NO synthesis in stimulated RAW264.7 cells also resulted in a threefold increase in intracellular caspase-1 activity. The NO donor S-nitroso-N-acetyl-DL-penicillamine inhibited caspase-1 activity in cells as well as the activity of purified recombinant caspase-1 and also prevented the cleavage of pro-IL-1beta and pro-IGIF by recombinant caspase-1. The inhibition of caspase-1 by NO was reversible by the addition of DTT, which is consistent with S-nitrosylation as the mechanism of caspase-1 inhibition. An in vivo role for the regulation of caspase-1 by NO was established in iNOS knockout animals, which exhibited significantly higher plasma levels of IL-1beta and IFN-gamma than their wild-type counterparts at 10 h following LPS injection. Taken together, these data indicate that NO suppresses IL-1beta and IGIF processing by inhibiting caspase-1 activity, providing evidence for a unique role for induced NO in regulating IL-1beta and IGIF release.