S-Nitrosothiols have been suggested to be mediators of many nitric oxide-dependent processes, including apoptosis and vascular relaxation. Thiol nitrosation is a poorly understood process in vivo and the mechanisms by which nitric oxide can be converted into a nitrosating agent have not been established. There is a discrepancy between the suggested biological roles of nitric oxide and its known chemical and physical properties. In this study we have examined the formation of S-nitrosothiols in lipopolysaccharide-treated RAW 264.7 cells. This treatment generated 17.4 ± 1.0 pmol/mg protein (mean ± SEM, n=27) of intracellular S-nitrosothiol that slowly decayed over several hours. S-Nitrosothiol formation depended on the formation of nitric oxide and not on the presence of nitrite. Extracellular thiols were nitrosated by cell-generated nitric oxide. OxyHb inhibited the formation of S-nitrosothiol indicating the nitrosation occurred more slowly than diffusion. We discuss several mechanisms for S-nitrosothiol formation and conclude that the nitrosation propensity of nitric oxide is a freely diffusible element that is not constrained within an individual cell, and that both nitric oxide per-se and nitric oxide-derived nitrosating agents are able to across cell membranes. To achieve intracellular localization of the nitrosation reaction, mechanisms must be invoked that do not involve the formation of nitric oxide as an intermediate.