Nitric oxide (NO) hyperpolarizes intestinal smooth muscle cells. This study was designed to determine the mechanism whereby NO activates K_Ca channels of circular smooth muscle of the rabbit colon. Transmural biopsies of the rabbit colon were stained for NADPH-diaphorase. Freshly dispersed circular smooth muscle cells were studied in the whole cell configuration, as well as in on-cell and excised inside-out patch recording configurations, while K_Ca current and the activity of K_Ca channels, respectively, were monitored. NADPH-diaphorase-positive nerve fibers were found in both muscle layers. NO (1%) increased whole cell net outward current by 79% and hyperpolarized resting membrane voltage from 59 to 73 mV (n = 8 cells, P < 0.01). In the on-cell patch recording configuration, NO (0.5% or 1%) in the bath increased NP_o of K_Ca channels; charybdotoxin (125 nM) in the pipette solution blocked this effect. In the excised inside-out patch recording configuration, NO (1%) had no effect on NP_o of K_Ca channels. In the on-cell patch recording configuration, methylene blue (1 µM) or cystamine (5 mM) in the bath solution decreased the effect of NO (1%) on NP_o of K_Ca channels. NP_o was increased by 8-bromo-cGMP (8-BrcGMP; 1 mM), a cGMP analog, and zaprinast (100 µM), an inhibitor of cGMP phosphodiesterase. These data suggest that NO increased whole cell outward K⁺ current by activating K_Ca channels through a cGMP pathway.