Increased flux of glucose through the polyol pathway has been implicated in the pathophysiology of secondary diabetic complications. The first step of this pathway, which generates sorbitol from glucose, is catalyzed by aldose reductase (AR) (AKR1B). In vitro, the binding of substrates and inhibitors to AR is highly sensitive to the oxidation state of the enzyme due to the presence of a hyper-reactive cysteine residue at the active site of the enzyme. This residue (Cys-298) can be readily modified in air or, by thiol-modifying reagents, nitric oxide (NO) donors and nitrosothiols. We show that exposure of rat erythrocytes to NO donors inhibits AR activity and AR mediated accumulation of sorbitol, possibly by S-glutathiolation of Cys-298. Both glutathiolation and inhibition of AR are reversible upon subsequent incubation of the cells with fresh media without NO donors. These observations suggest that NO regulates the cellular activity of AR and in turn the flux of glucose via the polyol pathway. The inhibition of AR by exogenous or endogenous NO appears to be related to reversible S-glutathiolation of the AR protein. Because hyperglycemic states are associated with a decrease in NO generation, the loss of NO-mediated repression of AR may be a significant factor in the activation of the polyol pathway and the development of secondary diabetic complications.