Shock states induce the expression of inducible nitric oxide synthase (iNOS) in both Kupffer cells and hepatocytes in the liver, but little is known about its subcellular localization in these cells. Studies were undertaken to characterize the subcellular location of iNOS in hepatocytes in response to sepsis. By immunofluorescence analysis, intraperitoneal challenge with bacterial lipopolysaccharide induced cytosolic iNOS in Kupffer cells but punctate labeling in hepatocytes. Cultured rat hepatocytes exposed to interferon gamma, interleukin 1, and tumor necrosis factor alpha showed iNOS protein expression within peroxisomes as early as 4 hours after stimulation, as determined by colabeling for catalase or PMP70. To a lesser extent, iNOS was also observed associated with the plasma membrane and in undefined intracellular aggregates. The nitric oxide synthase (NOS) antagonist L-N-imino-ornithine (L-NIO) did not affect the expression of iNOS within peroxisomes, cytoplasmic aggregates, or cytosol but increased plasma membrane localization of iNOS. Human iNOS transduced into iNOS-null mouse hepatocytes using an adenoviral vector also localized to peroxisomes. The expression of iNOS often resulted in the disappearance of detectable catalase in many hepatocytes. In conclusion, these studies establish the peroxisome as a site of iNOS localization in hepatocytes and show a relationship between iNOS up-regulation and decreased expression of catalase.