By the formation of the second messenger cGMP, NO-sensitive guanylyl cyclase (GC) plays a key role within the NO/cGMP signaling cascade which participates in vascular regulation and neurotransmission. The enzyme contains a prosthetic heme group that acts as the acceptor site for NO. High affinity binding of NO to the heme moiety leads to an up to 200-fold activation of the enzyme. Unexpectedly, NO dissociates with a half-life of a few seconds which appears fast enough to account for the deactivation of the enzyme in biological systems. YC-1 and its analogs act as NO sensitizers and led to the discovery of a novel pharmacologically and conceivably physiologically relevant regulatory principle of the enzyme. The two isoforms of the heterodimeric enzyme (alpha1beta1, alpha2beta1) are known that are functionally indistinguishable. The alpha2beta1-isoform mainly occurs in brain whereas the alpha1beta1-enzyme shows a broader distribution and represents the predominantly expressed form of NO-sensitive GC. Until recently, the enzyme has been thought to occur in the cytosol. However, latest evidence suggests that the alpha2-subunit mediates the membrane association of the alpha2beta1-isoform via interaction with a PDZ domain of the post-synaptic scaffold protein PSD-95. Binding to PSD-95 locates this isoform in close proximity to the NO-generating synthases thereby enabling the NO sensor to respond to locally elevated NO concentrations. In sum, the two known isoforms may stand for the neuronal and vascular form of NO-sensitive GC reflecting a possible association to the neuronal and endothelial NO-synthase, respectively.