The effects of glucocorticoid on the production of nitric oxide (NO) by murine microglial cells were investigated. Stimulation of the cells with lipopolysaccharide (LPS) or phorbol 12-myristate 13-acetate (PMA) after the treatment of recombinant interferon-gamma (rIFN-gamma) resulted in the increased accumulation of nitrite in the medium. Concomitant incubation of the cells with dexamethasone (DEX) markedly inhibited the production of NO in a dose dependent manner. DEX also suppressed both rIFN-gamma and rIFN-gamma plus LPS-induced activity of the enzyme protein kinase C (PKC), a putative regulator of NO synthesis, but had only a modest inhibitory effect on basal activity. In addition, the inhibitory effect of DEX on NO generation was mimicked by the treatment of PKC inhibitors such as staurosporine (STSN) and polymyxin B. Our findings show that glucocorticoids have the potential to modulate central nervous system (CNS) NO production via the inhibition of PKC activity particularly under the conditions of stimulated production of NO, such as inflammatory and demyelinating CNS disorders.