Arginase has been suggested to compete with nitric oxide synthase (NOS) for their common substrate, l-arginine. To study the mechanisms underlying this interaction, we compared arginase expression in isolated airways and the consequences of inhibiting arginase activity in vivo with NO production, lung inflammation, and lung function in both C57BL/6 and NOS2 knockout mice undergoing ovalbumin-induced airway inflammation, a mouse model of asthma. Arginases I and II were measured by western blot in isolated airways from sensitized C57BL/6 mice exposed to ovalbumin aerosol. Physiological and biochemical responses – inflammation, lung compliance, airway hyperreactivity, exhaled NO concentration, arginine concentration – were compared with the responses of NOS2 knockout mice. NOS2 knockout mice had increased total cells in lung lavage, decreased lung compliance, and increased airway hyperreactivity. Both arginase I and arginase II were constitutively expressed in the airways of normal C57BL/6 mice. Arginase I was up-regulated approximately 8-fold in the airways of C57BL/6 mice exposed to ovalbumin. Expression of both arginase isoforms were significantly upregulated in NOS2 knockout mice exposed to ovalbumin, with about 40- and 4-fold increases in arginases I and II, respectively. Arginine concentration in isolated airways was not significantly different in any of the groups studied. Inhibition of arginase by systemic treatment of C57BL/6 mice with a competitive inhibitor, Nω-hydroxy-nor-l-arginine (nor-NOHA), significantly decreased the lung inflammatory response to ovalbumin in these animals. We conclude that NOS2 knockout mice are more sensitive to ovalbumin-induced airway inflammation and its sequelae than are C57BL/6 mice, as determined by increased total cells in lung lavage, decreased lung compliance, and increased airway hyperreactivity, and that these findings are strongly correlated with increased expression of both arginase isoforms in the airways of the NOS2 knockout mice exposed to ovalbumin.