A number of diseases of the respiratory tract, as exemplified in this review by asthma, are associated with increased amounts of nitric oxide (NO) in the expired breath. Asthma is furthermore characterized by increased production of reactive oxygen species that scavenge NO to form more reactive nitrogen species as demonstrated by the enhanced presence of nitrated proteins in the lungs of these patients. This increased oxidative metabolism leaves less bioavailable NO and coincides with lower amounts of S-nitrosothiols. In this review, we speculate on mechanisms responsible for the increased amounts of NO in inflammatory airway disease and discuss the apparent paradox of higher levels of NO as opposed to decreased amounts of S-nitrosothiols. We will furthermore give an overview of the regulation of NO production and biochemical events by which NO transduces signals into cellular responses, with a particular focus on modulation of inflammation by NO. Lastly, difficulties in studying NO signaling and possible therapeutic uses for NO will be highlighted.