Recent evidence suggests that, like nitric oxide (NO), carbon monoxide (CO), another activator of soluble guanylyl cyclase, may serve as an intercellular messenger in the brain. Heme oxygenase, which converts heme to biliverdin and CO, is abundantly expressed in the brain and is localized to discrete neuronal populations. However, evidence for the actual generation of CO by neurons is lacking. Heme oxygenase-2 immunoreactivity is abundantly present in olfactory receptor neurons where it essentially colocalizes with immunoreactivity to soluble guanylyl cyclase, the target of CO action. To examine the generation of CO by neurons, we measured CO production directly and determined its relationship to cyclic GMP levels in cultured rat olfactory receptor neurons. This system has the advantage of not having measurable NO production, which could confound results since NO is a more potent activator of guanylyl cyclase than CO. Metabolic labeling experiments permitted the direct measurement of 14CO production by neurons in vitro. CO release parallels endogenous cyclic GMP concentrations with its peak at the immature stage of neuronal differentiation in culture. Cyclic GMP production is inhibited by zinc protoporphyrin-9 and zinc deuteroporphyrin IX 2,4-bis glycol, inhibitors of heme oxygenase, indicating that CO is an endogenous regulator of soluble guanylyl cyclase activities in these cells. Transforming growth factor-beta 2, an olfactory neurogenic factor, specifically shows a negative effect on CO release in olfactory receptor neurons. These results indicate that CO may serve as a gaseous neuronal messenger linked to cyclic GMP production and suggests its involvement in developmental processes of the olfactory receptor neuron.