Activated macrophages are known to oxidatively metabolize L-arginine to nitric oxide and citrulline. We have recently shown that nitric oxide is a potent inhibitory molecule in the in vitro rat mixed-splenocyte culture, resulting in inhibition of proliferation and cytolytic T-cell induction. We undertook this study using the sponge matrix allograft model in the rat to determine whether nitric oxide plays a role in an in vivo allograft response. Our experiments showed that on day 6 after grafting, when cytolytic activity of allograft-infiltrating cells is first detected, allogeneic graft fluid contains higher levels of NO2-/NO3- (the stable endproducts of nitric oxide metabolism) than syngeneic graft fluid. Furthermore, evaluation of the supernatants of cultured graft-infiltrating cells revealed that allogeneic graft-infiltrating cells spontaneously produce higher amounts of nitric oxide than syngeneic graft-infiltrating cells. The nitric oxide production was inhibited in the presence of NG-monomethyl-L-arginine (NMA), the competitive inhibitor of nitric oxide production. Most of the nitric oxide production was observed in the adherent macrophage fraction of the allograft-infiltrating cells. When allograft-infiltrating cells were cultured in the presence of NMA, donor-specific cytolytic activity was observed, whereas allograft-infiltrating cells cultured in the absence of NMA showed no cytolytic activity. These data show that nitric oxide production may play an important regulatory role in the allograft response.