The potential role of nitric oxide synthase-2 (NOS2) in acute lung injury (ALI) has gained increasing attention. This study evaluates the effects of hypoxia, an important feature of ALI, on NOS2 expression in a rat model of ALI caused by exposure to hypoxia and LPS. Exposure to hypoxia alone had no effect on the expression of NOS2 in rat lungs. LPS treatment resulted in a significant increase in NOS2 in the lungs, which was further enhanced by concomitant exposure to hypoxia. Immunohistochemical analysis and in situ hybridization showed no changes in the expression of NOS2 in lung resident cells under any conditions. The increase in NOS2 levels is mainly due to the influx of NOS2-expressing inflammatory cells. By morphologic analysis, these inflammatory cells were identified as neutrophils, lymphocytes, and monocytes. In vitro experiments of lung epithelial and endothelial cell lines showed no detectable expression of NOS2 with any of the treatments. In a macrophage cell line, LPS-induced NOS2 expression was not affected by the concomitant exposure to hypoxia. In conclusion, LPS increases NOS2 expression in rat lungs through the recruitment of NOS2-producing leukocytes. Simultaneous exposure to LPS and hypoxia results in a greater influx of inflammatory cells that further enhances NOS2 expression.