Calcineurin (PP2B) has recently been shown to be upregulated in the medullary thick ascending limb (mTAL) during diabetes. The mTAL expresses all three isoforms of nitric oxide synthase (NOS), which are subject to phosphoregulation and represent substrates for PP2B. Therefore, we hypothesized that diabetes induces PP2B-dependent upregulation of NOS activity and NO production in the mTAL. Three weeks after injection of streptozotocin (STZ rats) or vehicle (sham rats), mTAL suspensions were prepared for use in functional and biochemical assays. PP2B activity and expression were increased in mTALs from STZ rats compared with sham. Nitrite production was significantly reduced in mTALs from STZ rats compared with sham. However, incubation with the free radical scavenger, tempol, unmasked a significant increase in nitrite production by mTALs from STZ rats. Inhibition of PP2B attenuated the increase in nitrite production and NOS activity evident in mTALs from STZ rats. Analysis of specific NOS isoform activity revealed increased NOS1 and NOS2 activities in mTALs from STZ rats. All three NOS isoform activities were regulated in a PP2B-dependent manner. Western blot analysis detected no differences in NOS isoform expression, although phosphorylation of pThr(495)-NOS3 was significantly reduced in mTALs from STZ rats. Phosphorylation of pSer(852)-NOS1, pSer(633)-NOS3, and pSer(1177)-NOS3 was similar in mTALs from STZ and sham rats. Inhibition of PP2B did not alter the phosphorylation of NOS1 or NOS3 at known sites. In conclusion, while NO bioavailability in mTALs is reduced during diabetes, free radical scavenging with tempol unmasks increased NO production that involves PP2B-dependent activation of NOS1 and NOS2.