A certain level of normal or near-normal hepatic function is essential for survival. Over the last few years, the importance of the regulation of hepatic function by the interaction of specific cell populations in the liver has become increasingly evident. Kupffer cells, the fixed hepatic macrophages, have the ability to profoundly affect hepatocyte function, while hepatocytes, in turn, possess the capacity to modify Kupffer cell function. Nitric oxide, produced from the amino acid L-arginine, is a short-lived radical that is a potent mediator of cellular function and cell-cell interaction, and is synthesized by both Kupffer cells and hepatocytes. The purpose of this review is to examine the numerous areas in which nitric oxide may mediate the interactions between Kupffer cells and hepatocytes, and therefore regulate both normal and abnormal hepatic physiology and function.