We have previously reported that mice lacking inducible nitric oxide synthase (NOS2) developed enhanced Th1 cell responses. We now investigated the mechanism by which NO modulates Th1 cells differentiation. Peritoneal macrophages from NOS2-deficient mice infected with Leishmania major in vivo or stimulated with IFN-gamma or lipopolysaccharide (LPS) in vitro produced significantly higher levels of IL-12 than those from heterozygous or wild-type mice. A macrophage cell line, J774, produced significant amounts of IL-12 following activation with LPS, or LPS plus IFN-gamma. This could be markedly enhanced by the NOS inhibitor L-NG monomethyl arginine (L-NMMA), but profoundly inhibited by the NO-generating compound S-nitroso-N-acetyl-penicillamine (SNAP). The effect of NO in this system is selective, since SNAP enhanced and L-NMMA decreased TNF-alpha synthesis by LPS-activated J774 cells. The differential effect of NO on IL-12 and TNF-alpha is at the transcriptional level and is activation dependent. Since IL-12 is a major inducer of Th1 cells which produce IFN-gamma that can activate macrophages to produce IL-12, our data demonstrate that NO can be an inhibitor of this feedback loop, preventing the excessive amplification of Th1 cells which are implicated in a range of immunopathologies.