Nitric oxide (NO) is known to be synthesized in several tissues and to increase the formation of cyclic GMP through the activation of soluble guanylate cyclases. Since cyclic GMP plays an important role in visual transduction, we investigated the presence of nitric oxide synthesizing activity in retinal rod outer segments. Bovine rod outer segments were isolated intact and separated into membrane and cytosolic fractions. Nitric oxide synthase activity was assayed by measuring the conversion of L-arginine to L-citrulline. Both membrane and cytosolic fractions were active in the presence of calcium and calmodulin. The activity in both fractions was stimulated by the nitric oxide synthase cofactors FAD, FMN, and tetrahydrobiopterin and inhibited by the L-arginine analog, L-monomethyl arginine. The Km for L-arginine was similar, about 5 microM for the enzyme in both fractions. However, the two fractions differed in their calcium/calmodulin dependence: the membrane fraction exhibited basal activity even in the absence of added calcium and calmodulin while the cytosolic fraction was inactive. But the activity increased in both fractions when supplemented with calcium/calmodulin: in membranes from about 40 to 110 fmol/min/mg of protein and in the cytosol from near zero to about 350 fmol/min/mg of protein in assays carried out at 0.3 microM L-arginine. The two enzymes also responded differently to detergent: the activity of the membrane enzyme was doubled by Triton X-100 while that of the cytosolic enzyme was unaffected. These results show that NO is produced by cytosolic and membrane-associated enzymes with distinguishable properties.(ABSTRACT TRUNCATED AT 250 WORDS)