Despite its widespread biological importance, knowledge about the basic workings of the nitric oxide (NO) signaling pathway at the cellular level has been unsatisfactory. As reviewed here, recent findings have begun to rectify this deficiency. Elementary NO signals may be very discrete, being short lived (seconds or less), of low amplitude (peak concentration in the low nanomolar range), and confined to the immediate vicinity of the source (a micron or less). A more global signal may occur when many nearby sources are active simultaneously, though the amplitude appears to remain low. The properties of guanylyl cyclase (GC)-coupled NO receptors, for which a kinetic model is introduced, are well tuned to detect NO signals. The receptors can respond even to brief pulses of NO because they activate and deactivate with sub-second kinetics and they possess the appropriate sensitivity to low nanomolar NO concentrations. In some cells at least, the NO-evoked GC activity is very high, equivalent to the synthesis of up to 100 microM cGMP per second. The resulting shapes and sizes of cellular cGMP responses can vary considerably from cell to cell, however, which is likely to have repercussions for the selection of downstream pathways. The cellular diversity can be explained by variations in the rates at which the receptors desensitize and in the rates of cGMP hydrolysis by phosphodiesterases. There is a growing list of factors that may serve to modulate NO receptor function in cells, including Ca²⁺, ATP, phosphorylation by kinases, and physical interactions with other proteins.