The principal objective of this study was to test the hypothesis that nitroprusside relaxes vascular smooth muscle via the reactive intermediate, nitric oxide (NO), and that the biologic action of NO is associated with the activation of guanylate cyclase. Nitroprusside, N-methyl-N'-nitro-N-nitrosoguanidine (MNNG) and NO elicit concentration-dependent relaxation of precontraced helical strips of bovine coronary artery. Nitroprusside, MNNG and NO also markedly activate soluble guanylate cyclase from bovine coronary arterial smooth muscle and, thereby, stimulate the formation of cyclic GMP. Three heme proteins, hemoglobin, methemoglobin and myoglobin, and the oxidant, methylene blue, abolish the coronary arterial relaxation elicited by NO. Similarly, these heme proteins, methylene blue and another oxidant, ferricyanide, markedly inhibit the activation of coronary arterial guanylate cyclase by NO, nitroprusside and MNNG. The following findings support the view that certain nitroso-containing compounds liberate NO in tissue:heme proteins, which cannot permeate cells, inhibit coronary arterial relaxation elicited by NO, but not by nitroprusside or MNNG; the vital stain, methylene blue, inhibits relaxation by NO, nitroprusside and MNNG; heme proteins and oxidants inhibit guanylate cyclase activation by NO, nitroprusside and MNNG in cell-free mixtures. The findings that inhibitors of NO-induced relaxation of coronary artery also inhibit coronary arterial guanylate cyclase activation suggest that cyclic GMP formation may be associated with coronary arterial smooth muscle relaxation.