Abstract: We have used purified microglial cultures obtained from neonatal rat brains to study some aspects of the regulation of prostanoid production in these cells. We found that nitric oxide, which is released into the culture medium along with prostanoids when the cells are exposed to lipopolysaccharide (1–100 ng/ml), can down-regulate prostanoid biosynthesis. Indeed, the abrogation of endogenous nitric oxide production, obtained by depleting the medium of the precursor l-arginine or by blocking the activity of nitric oxide synthase by the specific inhibitor NG-monomethyl-l-arginine, led to a remarkable increase in lipopolysaccharide-induced prostanoid release. Moreover, the nitric oxide-generating compound 3-morpholinosydnonimine caused a substantial reduction of prostanoid formation, in the absence of endogenous nitric oxide, suggesting that both endogenous and exogenous nitric oxide may inhibit the induced prostanoid production. We also found that interferon-γ potentiated the effect of lipopolysaccharide on nitrite accumulation as previously described by others and depressed the lipopolysaccharide-evoked production of prostaglandin E2, prostaglandin D2, and thromboxane. It is interesting that the inhibitory effect of interferon-γ on prostanoid production did not appear to depend on the potentiation of NO release, as it was present also when the endogenous synthesis of nitric oxide was abrogated. Additional experiments showed that interferon-γ and nitric oxide act mainly by down-regulating the lipopolysaccharide-induced enzymatic activity and expression (analyzed by western blot) of cyclooxygenase-2. Our data indicate that microglial prostanoid biosynthesis induced by proinflammatory stimuli, such as lipopolysaccharide, is tightly regulated by nitric oxide. Interferon-γ appears to affect the balance between these local mediators by favoring nitric oxide production and inhibiting the prostanoid cascade and may thus contribute to the modulation of inflammation, local immune reactivity, and neuronal damage.