Regulation of cerebral blood flow by neural activity helps to supply the energy required by active neurons and is the basis for BOLD and PET functional imaging techniques. The modification of arteriolar smooth muscle tone by neurotransmitters and modulators has been extensively studied. Recent work has shown that neural regulation of cerebral blood flow can also occur at the level of the capillary, via smooth muscle-like cells called pericytes, which constrict in response to noradrenaline and dilate in response to glutamate (Peppiatt et al., 2006). Nitric oxide has a well-established role in controlling basal vasodilatory tone in arteriolar smooth muscle, being produced by the endothelial isoform of nitric oxide synthase and diffusing into smooth muscle cells where it increases the intracellular cGMP concentration. In the brain and the periphery, nitric oxide produced by neurons can also increase arteriolar dilatory tone, allowing increased blood flow to areas which have an increased energy requirement. Here, we show that nitric oxide can also modulate pericyte vasodilatory tone in a manner depending on the oxygen concentration. Capillaries dilated by glutamate constricted in response to a non-specific nitric oxide synthase inhibitor at high (95%) but not low (20%) superfused oxygen concentrations. In addition, tonic nitric oxide levels provide basal dilatory tone to capillaries, as inhibition of nitric oxide synthase, in the absence of added glutamate, constricted capillaries at pericytes (this experiment was performed using 95% oxygen). This basal nitric oxide is derived from neuronal, not endothelial, nitric oxide synthase, as an inhibitor of the neuronal nitric oxide synthase isoform (1 µM 1400W) had the same effect on capillary tone as did the non-specific inhibitor (100 µM L-nitroarginine). These data extend to CNS capillaries the notion that nitric oxide can regulate vessel diameter, as is already established for CNS arterioles.