A stretch of about 150 amino acids located between the heme and the calmodulin recognition sequence of nitric oxide synthase (NOS) has been strongly conserved within isoforms and was proposed to participate in pteridine binding because of sequence similarities to the folate binding site of dihydrofolate reductase (DHFR). In the present study we tested four synthetic peptides corresponding to sequences located within the putative DHFR domain of rat neuronal NOS for their effects on catalytic and binding activities of the recombinant enzyme purified from baculovirus-infected insect cells. Three of the selected peptides had no effects at concentrations of up to 0.1 mM, but one peptide, corresponding to amino acid residues 564-582 of neuronal NOS, led to a concentration-dependent inhibition of L-citrulline formation. The potency of the peptide decreased with increasing assay concentrations of NOS, pointing to a competitive interaction with a specific structure of the enzyme. The peptide was not competitive with L-arginine and H4biopterin, did not antagonize binding of radiolabeled NG-nitro-L-arginine or H4biopterin, and had no effect on Ca2+/calmodulin-dependent reduction of cytochrome c. However, the presence of the peptide led to a pronounced inhibition of NADPH oxidation in the absence of L-arginine and prevented stimulation of this reaction by the amino acid substrate. These results indicate that sequence 564-582 of neuronal NOS does not contribute to L-arginine or H4biopterin binding but is critically involved in the electron transfer from the reductase domain to the heme.