Cyclic GMP has been shown in recent years to directly activate ion channels in bipolar and ganglion cells, and to indirectly regulate coupling between horizontal cells, and between bipolar and amacrine cells. In all of these cases, the effects of cyclic GMP are mimicked by nitric oxide. An increase in calcium concentration stimulates the production of nitric oxide by neuronal and endothelial forms of nitric oxide synthase, which in turn activates soluble guanylate cyclases, enhancing the synthesis of cyclic GMP. Though some effects of nitric oxide do not involve cyclic GMP, the nitric oxide-cyclic GMP cascade is well recognized as a signaling mechanism in brain and other tissues. The widespread occurrence of nitric oxide/cyclic GMP-regulated ion channel activity in retinal neurons raises the possibility that nitric-oxide-sensitive soluble guanylate cyclases play an important role in cell–cell communication, and possibly, synaptic transmission. Immunohistochemical studies have indicated the presence of soluble guanylate cyclase in retinal synaptic layers, but such studies are not suitable for determination of the density or quantitative subcellular distribution of the enzyme. Microanalytical methods involving microdissection of frozen retina also showed the presence of cyclase activity in retinal plexiform layers but these methods did not permit distinction between nitric oxide-sensitive and insensitive cyclases. In this study, we fractionated retinal homogenate into the cytosolic and synaptosomal fractions and investigated the specific activity and distribution of soluble guanylate cyclase and nitric oxide synthase. The results show that both enzymes are present in the synaptosomal fractions derived from inner and outer plexiform layers. The synaptosomal fraction derived from inner retina was highly enriched in cyclase activity. Nitric oxide synthase activity was also higher in the inner than outer retinal synaptosomal fraction. The results suggest that the nitric oxide-cyclic GMP system is operational in both synaptic layers of retina and that it may play a more significant role in the inner retina.