The hypothesis was tested that induction of arginase expression in macrophages (M phi) diminishes nitric oxide (NO) synthesis due to intracellular competition between arginase and inducible nitric oxide synthase (iNOS) for L-arginine (L-arg). Murine M phi cell lines and bone marrow-derived M phi (BMM) were stimulated to express either iNOS or arginase or to co-express these two enzymes. The response pattern obtained was complex but allowed the following conclusions: (i) iNOS and arginase are differentially regulated. (ii) High intracellular arginase levels do not limit the capacity of M phi to synthesize NO even when the L-arg concentration in the culture medium is lowered to physiological levels. (iii) Arginase levels in BMM pre-exposed to either M phi colony-stimulating factor (M-CSF) or granulocyte-M phi colony-stimulating factor (GM-CSF) differ markedly, but iNOS expression and NO synthesis by the two BMM types is similar. (iv) Regulation of iNOS and arginase differs between primary murine bone marrow M phi and murine M phi cell lines. (v) Arginase activity appears to be inhibited during high-output NO synthesis. Taken together, our results show that NO production by M phi is not compromised by conditions that increase intracellular arginase activity.