The various mechanisms underlying postnatal neurogenesis from discrete CNS regions have emerged recently. However, little is known about postnatal neurogenesis in dorsal root ganglion (DRG). BrdU incorporation and subsequent immunostaining for BrdU, neural stem cell marker, nestin and neuronal marker, PGP 9.5 have provided evidence for postnatal neurogenesis in DRG. We further demonstrate, in vivo and in vitro, that nitric oxide (NO) regulates neural stem cells (nestin+) proliferation and, possibly, differentiation into neurons. Surprisingly, nerve growth factor (NGF) had no effect on nestin+ cells proliferation. Axotomy or NGF-deprivation of DRG neurons-satellite glia co-culture increases NO production by neurons and treating with a NO synthase (NOS) inhibitor, N G-nitro-L-arginine methylester (L-NAME) in vitro or 7-nitroindazole (7NI) in vivo, causes a significant increase in nestin+ cell numbers. However, a soluble guanylyl cyclase (sGC) blocker, 1H-[1, 2, 4] oxadiazolo [4, 3-a] quinoxalin-1-one (ODQ) treatment of NGF-deprived DRG neurons-satellite glia co-culture had no significant effect on nestin+ cell numbers. This implies NO regulates nestin+ cell proliferation independent of cGMP. We hypothesised that the neuronal-restrictive silencer transcription factor (NRSF, also termed REST), a master regulator of neuronal genes in non-neuronal cells, may be modulated by NO in satellite glia cultures. A NO donor, dimethyl-triamino-benzidine (DETA)-NO treatment of satellite glia cell cultures results in a significant increase in the NRSF/REST mRNA expression. The majority of cultured satellite glia cells express nestin, and also show increased levels of NOS, thus L-NAME treatment of these cultures causes a dramatic reduction in NRSF/REST mRNA. Overall these results suggest that NO inhibits neurogenesis in DRG and this is correlated with modulation of NRSF, a known modulator of differentiation.