In the presence of porcine aortic endothelial cytosol, soluble guanylyl cyclase purified from bovine lung was activated by L-arginine up to 2.5-fold, with an EC50 of about 6 microM. This activation was dependent on NADPH and Ca2+. The EC50 for Ca2+ was about 60 nM. No effect of L-arginine on guanylyl cyclase was observed when the cytosolic proteins were heat-denaturated. The effect of L-arginine was inhibited by NG-monomethyl-L-arginine and hemoglobin. These results indicate that endothelial cells contain a cytosolic enzyme which is directly or indirectly regulated by Ca2+ and converts L-arginine into a compound which in stimulating soluble guanylyl cyclase behaves similar to endothelium-derived relaxing factor.