CD46 is a transmembrane complement regulatory protein widely expressed on nucleated human cells. Laboratory-adapted strains of measles virus (MV) bind to the extracellular domains of CD46 to enter human cells. The cytoplasmic portion of CD46 consists of a common juxtamembrane region and different distal sequences called Cyt1 and Cyt2. The biological functions of these cytoplasmic sequences are unknown. In this study, we show that expression of human CD46 with the Cyt1 cytoplasmic domain in mouse macrophages enhances production of nitric oxide (NO) in response to MV infection in the presence of gamma interferon (IFN-gamma). Human CD46 does not increase the basal levels of NO production in mouse macrophages and does not augment NO production induced by double-stranded polyribonucleotides. Replacing the cytoplasmic domain of human CD46 with Cyt2 reduces MV and IFN-gamma-induced NO production in mouse macrophages. Deleting the entire cytoplasmic domains of human CD46 does not prevent MV infection but markedly attenuates NO production in response to MV and IFN-gamma. Mouse macrophages expressing a tailless human CD46 mutant are more susceptible to MV infection and produce 2 to 3 orders of magnitude more infectious virus than mouse macrophages expressing human CD46 with intact cytoplasmic domains. These results reveal a novel function of CD46 dependent on the cytoplasmic domains (especially Cyt1), which augments NO production in macrophages. These findings may have significant implications for roles of CD46 in innate immunity and MV pathogenesis.