Neurally mediated relaxation of canine colonic smooth muscle is associated with an increase in the resting membrane potential and is blocked by inhibition of nitric oxide synthesis. N omega-nitro-L-arginine completely prevented nerve-mediated relaxation, an effect that was reversed by L-arginine but not D-arginine. Vasoactive intestinal peptide (VIP) also relaxed canine colonic smooth muscle. Part of this relaxation was due to activation of inhibitory nerves and this effect was mediated by nitric oxide. In addition to the neurally mediated effect, VIP affected smooth muscle directly. This relaxation was associated with a reduction of the plateau phase of the slow-wave type action potential, without an effect on the resting membrane potential. This action of VIP was similar to that of forskolin which suggests that VIP increases intracellular cyclic AMP. In summary, nitric oxide mediates inhibitory innervation to smooth muscle as well as activation of inhibitory nerves by VIP. The electrophysiological mechanism by which VIP directly affects smooth muscle is described, an effect not mediated by nitric oxide.