Lung ischemia-reperfusion (IR) injury causes alveolar, epithelial and endothelial cell dysfunction which often results in decreased alveolar perfusion, characteristic of an acute respiratory distress syndrome. Nitric oxide (NO) from endothelium-derived NO synthase (eNOS) helps maintain a low pulmonary vascular resistance. Paradoxically, during acute lung injury, overproduction of NO via inducible NO synthase (iNOS) and oxidative stress lead to reactive oxygen and nitrogen species (ROS and RNS) formation and vascular dysfunction. RNS potentiate vascular and cellular injury by oxidation, by decreasing NO bioavailability, and by regulating NOS isoforms. RNS potentiate their own production by uncoupling NO production through eNOS by oxidation and disruption of Akt-mediated phosphorylation of eNOS. This review focuses on effects of NO which cause vascular dysfunction in the unique environment of the lung and presents a hypothesis for interplay between eNOS and iNOS activation with implications for development of new strategies to treat vascular dysfunction associated with IR.