Nitric oxide (NO) functions as a transmitter/diffusible second messenger in most tissues, its formation from L-arginine typically being triggered by a rise in Ca2+(via calmodulin). NO exerts physiological effects by binding to specialized guanylyl cyclase-coupled receptors, resulting in cGMP generation in target cells. Despite having many context-dependent roles and being implicated in numerous disease states, there has been a lack of conceptual understanding of how NO operates at the cellular and subcellular levels. From this perspective, many uncertainties remain, including the NO concentrations attained following activation of NO synthases (prototypically in neurones or endothelial cells) by different stimuli, their time-courses, how far the signals spread in physiologically relevant concentrations (whatever those may be), what constitutes a pathological NO concentration, and the mechanisms responsible for NO consumption in different tissues, how rapidly they operate, and where. We have adopted several approaches aimed at gaining a more concrete, quantitative, understanding of this widespread signalling pathway. These approaches have included analyzing NO receptor function, allowing it to be encapsulated in a quantitative model (Roy et al., 2008), real-time imaging of cellular NO signal transduction in target cells (Batchelor et al., 2010), and the use of ultrasensitive detector cells to record NO generation from native sources (Wood et al., 2011). The current picture is that, when generated in a synapse, NO is likely to act only very locally, probably within the bounds of that synapse, and to exist only in very low (picomolar) concentrations. By virtue of engaging enzyme-coupled receptors, these low NO concentrations, which are well below the affinity of NO for its receptors (10 nM), are able to stimulate physiological (submicromolar) rises in cGMP concentration. By contrast, when populations of densely-packed neurones are active simultaneously, NO is able to act more like a volume transmitter, coordinating the behaviour of intermingled cells even though they lack any anatomical connectivity with the NO-producers.