1. The present study was undertaken to determine the locus of nitric oxide (NO) production that is toxic to the lung and produces acute pulmonary oedema in endotoxin shock, to examine and compare the effects of changes in lung perfusate on endotoxin-induced pulmonary oedema (EPE) and to evaluate the involvement of constitutive and inducible NO synthase (cNOS and iNOS, respectively). 2. Experiments were designed to induce septic shock in anaesthetized rats with the administration of Escherichia coli lipopolysaccharide (LPS). Exhaled NO, lung weight (LW)/bodyweight (BW) ratio, LW gain (LWG) and lung histology were measured and observed to determine the degree of EPE 4 h following LPS. The EPE was compared between groups in which LPS had been injected either into the systemic circulation or into the isolated perfused lung. The lung perfusate was altered from whole blood to physiological saline solution (PSS) with 6% albumin to test whether different lung perfusions affected EPE. Pretreatment with various NOS inhibitors was undertaken 10 min before LPS to investigate the contribution of cNOS and iNOS to the observed effects. 3. Endotoxin caused profound systemic hypotension, but little change in pulmonary arterial pressure. The extent of EPE was not different between that induced by systemic injection and that following administration to isolated lungs preparations. Replacement of whole blood with PSS greatly attenuated (P < 0.05) EPE. In blood-perfused lungs, pretreatment with NOS inhibitors, such as Nomega-nitro-L-arginine methyl ester, aminoguanidine and dexamethasone, significantly prevented EPE (P < 0.05). 4. The major site of NO production through the whole blood is in the lung. The NO production mediated by the iNOS system is toxic to the endothelium in the pulmonary microvasculature. Inhalation of NO for patients with sepsis may be used with clinical caution. Therapeutic consideration of lung extracorporeal perfusion with PSS and pharmacological pretreatment with iNOS inhibitors may be warranted.