Cyclic AMP formation from ATP was stimulated by unpurified and partially purified soluble hepatic guanylate cyclase in the presence of nitric oxide (NO) or compounds containing a nitroso moiety such as nitroprusside, N-methyl-N-nitro-N-nitrosoguanidine (MNNG), nitrosyl ferroheme, and S-nitrosothiols. Cyclic AMP formation was undetectable in the absence of NO or nitroso compounds and was not stimulated by fluoride or glucagon, indicating the absence of adenylate cyclase activity. The nitroso compounds failed to activate, whereas fluoride or glucagon activated, adenylate cyclase in washed rat liver membrane fractions. Cyclic GMP formation from GTP was markedly stimulated by the soluble hepatic fraction in the presence of NO or nitroso compounds. Cyclic AMP formation by partially purified guanylate cyclase was competitively inhibited by GTP and cyclic GMP formation is well-known to be competitively inhibited by ATP. Therefore, it appears that activated guanylate cyclase, rather than adenylate cyclase, was responsible for the formation of cyclic AMP from ATP. Formation of cyclic AMP of cyclic GMP was enhanced by thiols, inhibited by hemoproteins and oxidants, and required the addition of either Mg2+ or Mn2+. Further, several nitrosyl ferroheme compounds and S-nitrosothiols stimulated the formation of both cyclic AMP and cyclic GMP by the soluble hepatic fraction. These observations support the view that soluble guanylate cyclase is capable, under certain well-defined conditions, of catalyzing the conversion of ATP to cyclic AMP.