Our recent experimental work demonstrated that a neutrophil-dependent inflammatory response in the lung prevented the normal up-regulation of alveolar fluid clearance by catecholamines following hemorrhagic shock. In this study, we tested the hypothesis that the release of NO within the airspaces of the lung was responsible for the shock-mediated failure of the alveolar epithelium to respond to catecholamines in rats. Hemorrhagic shock was associated with an inducible NO synthase (iNOS)-dependent increase in the lung production of NO and a failure of the alveolar epithelium to up-regulate vectorial fluid transport in response to β-adrenergic agonists. Inhibition of iNOS restored the normal catecholamine-mediated up-regulation of alveolar liquid clearance. Airspace instillation of dibutyryl cAMP, a stable analog of cAMP, restored the normal fluid transport capacity of the alveolar epithelium after prolonged hemorrhagic shock, whereas direct stimulation of adenyl cyclase by forskolin had no effect. Pretreatment with pyrrolidine dithiocarbamate or sulfasalazine attenuated the iNOS-dependent production of NO in the lung and restored the normal up-regulation of alveolar fluid clearance by catecholamines after prolonged hemorrhagic shock. Based on in vitro studies with an alveolar epithelial cell line, A549 cells, the effect of sulfasalazine appeared to be mediated in part by inhibition of NF-κB activation, and the protective effect was mediated by the inhibition of IκBα protein degradation. In summary, these results provide the first in vivo evidence that NO, released within the airspaces of the lung probably secondary to the NF-κB-dependent activation of iNOS, is a major proximal inflammatory mediator that limits the rate of alveolar epithelial transport after prolonged hemorrhagic shock by directly impairing the function of membrane proteins involved in the β-adrenergic receptor-cAMP signaling pathway in alveolar epithelium.