NO (nitric oxide) is a highly reactive free radical gas thought to play a major role in the invertebrate immune response by harming pathogens and limiting their growth. Here we report on studies of nitric oxide synthase (NOS) genes in the crustacean Daphnia, one of the few non-insect arthropod models used to study host-pathogen interactions. While the NOS gene is found as a single copy in other invertebrates, we found two copies (NOS1 and NOS2), which a phylogenetic reconstruction showed to be the result of an ancient duplication event. Both genes bear features commonly found in invertebrate NOS, however, the two genes differ in their rate of evolution, intraspecific polymorphism and expression level. We tested whether the more rapid evolution of NOS2 could be due to positive selection, but found the rate of amino-acid substitutions between Daphnia species to be compatible with a neutral model. To associate NOS or NO activity with infection, we performed infection experiments with Daphnia magna and one of its natural pathogens (the bacterium Pasteuria ramosa). In one set of experimental infections, we supplemented D. magna with L-arginine, the NOS substrate, or with L-NAME, a NOS antagonist, and found this to result in lower and higher infection levels, respectively, which is at least compatible with the notion that NO may aid defence against Pasteuria. A second experiment indicated that NOS transcription does not increase following exposure to Pasteuria. Thus, the function of NOS in Daphnia immunity remains uncertain, but the pattern of gene duplication and subsequent divergence suggests evolution via neo- or subfunctionalization.