By remodeling the phagosomal membrane, the type III secretion system encoded within the Salmonella pathogenicity island-2 (SPI2) helps Salmonella thrive within professional phagocytes. We report here that nitric oxide (NO) generated by IFNgamma-activated macrophages abrogates the intracellular survival advantage associated with a functional SPI2 type III secretion system. NO congeners inhibit overall expression of SPI2 effectors encoded both inside and outside the SPI2 gene cluster, reflecting a reduced transcript level of the sensor kinase SsrA that governs overall SPI2 transcription. Down-regulation of SPI2 expression in IFNgamma-treated macrophages does not seem to be the result of global NO cytotoxicity, because transcription of the housekeeping rpoD sigma factor remains unchanged, whereas the expression of the hmpA-encoded, NO-metabolizing flavohemoprotein is stimulated. Because of the reduced SPI2 expression, Salmonella-containing vacuoles interact more efficiently with compartments of the late endosomal/lysosomal system in NO-producing, IFNgamma-treated macrophages. These findings demonstrate that inhibition of intracellular SPI2 transcription by NO promotes the interaction of Salmonella phagosomes with the degradative compartments required for enhanced antimicrobial activity. Transcriptional repression of a type III secretion system that blocks phagolysosome biogenesis represents a novel mechanism by which NO mediates resistance of IFNgamma-activated phagocytes to an intracellular pathogen.