A soluble enzyme obtained from rat forebrain catalyzes the NADPH-dependent formation of nitric oxide (NO) and citrulline from L-arginine. The NO formed stimulates the soluble guanylate cyclase and this stimulation is abolished by low concentrations of hemoglobin. The synthesis of NO and citrulline is dependent on the presence of physiological concentrations of free Ca2+ and is inhibited by NG-monomethyl-L-arginine, but not by its enantiomer NG-monomethyl-D-arginine or by L-canavanine. L-Homoarginine, L-arginyl-L-aspartate, or L-arginine methyl ester can replace L-arginine as substrates for the enzyme. These results indicate that NO is formed from L-arginine in the brain through an enzymic reaction similar to that in vascular endothelial cells, neutrophils, and macrophages, adding support to our hypothesis that the formation of NO from L-arginine is a widespread transduction mechanism for the stimulation of the soluble guanylate cyclase.