Many studies have revealed the free radical nitric oxide (NO) to be an important modulator of vascular and neuronal physiology. It also plays a developmental role in regulating synapse formation and patterning. Recent studies suggest that NO may also mediate the switch from proliferation to differentiation during neurogenesis. Many mechanisms of this response are conserved between neuronal precursor cells and the cells of the vascular system, where NO can inhibit the proliferative response of endothelial and smooth-muscle cells to injury. In cultured neuroblastoma cells, NO synthase (NOS) expression is increased in the presence of various growth factors and mitogens. Subsequent production of NO leads to cessation of cell division and the acquisition of a differentiated phenotype. The inhibitory action of NO on neuroblast proliferation has also been demonstrated in vivo for vertebrate and invertebrate nervous systems, as well as in the adult brain. Potential downstream effectors of NO include the second messenger cyclic GMP, activation of the tumor-suppressor genes p53 and Rb, and the cyclin-dependent kinase inhibitor p21. These studies highlight a new role for NO in the nervous system, as a coordinator of proliferation and patterning during neural development and adult neurogenesis.