Signaling by nitric oxide (NO) and guanosine 3',5'-cyclic monophosphate (cGMP) modulates fluid transport in Drosophila melanogaster. Expression of an inducible transgene encoding Drosophila NO synthase (dNOS) increases both NOS activity in Malpighian (renal) tubules and DNOS protein in both type I (principal) and type II (stellate) cells. However, cGMP content is increased only in principal cells. DNOS overexpression results in elevated basal rates of fluid transport in the presence of the phosphodiesterase (PDE) inhibitor, Zaprinast. Direct assay of tubule cGMP-hydrolyzing phosphodiesterase (cG-PDE) activity in wild-type and dNOS transgenic lines shows that cG-PDE activity is Zaprinast sensitive and is elevated upon dNOS induction. Zaprinast treatment increases cGMP content in tubules, particularly at the apical regions of principal cells, suggesting localization of Zaprinast-sensitive cG-PDE to these areas. Potential cross talk between activated NO/cGMP and calcium signaling was assessed in vivo with a targeted aequorin transgene. Activated DNOS signaling alone does not modify either neuropeptide (CAP2b)- or cGMP-induced increases in cytosolic calcium levels. However, in the presence of Zaprinast, both CAP2b-and cGMP-stimulated calcium levels are potentiated upon DNOS overexpression. Use of the calcium channel blocker, verapamil, abolishes the Zaprinast-induced transport phenotype in dNOS-overexpressing tubules. Molecular genetic intervention in the NO/cGMP signaling pathway has uncovered a pivotal role for cell-specific cG-PDE in regulating the poise of the fluid transporting Malpighian tubule via direct effects on intracellular cGMP concentration and localization and via interactions with calcium signaling mechanisms.