The nature of the inhibitory non-adrenergic non-cholinergic (NANC) neurotransmitter was studied in circular muscle strips of the canine terminal ileum and ileocolonic junction. Nitric oxide (NO) induced tetrodotoxin-resistant NANC relaxation, similar to that induced by electrical stimulation or acetylcholine (ACh). Incubation with the stereospecific inhibitors of NO biosynthesis, NG-monomethyl-L-arginine (L-NMMA) and NG-nitro-L-arginine (L-NNA), resulted in an increase of basal tension in the ileocolonic junction which was partly reversed by L-arginine but not by D-arginine. Moreover, L-NMMA and L-NNA, but not D-NMMA, concentration dependently inhibited the NANC relaxation in response to electrical stimulation and ACh, but not that in response to NO or nitroglycerin. This inhibitory effect was reversed by L-arginine but not by D-arginine. Hemoglobin reduced the NANC relaxation in response to electrical stimulation, ACh and nitroglycerin, and abolished the responses to NO. Our results suggest that NO or a NO releasing substance mediates the NANC relaxation in the canine terminal ileum and ileocolonic junction.