Nitric oxide (NO) and related molecules play important roles in vascular biology. NO modifies proteins through nitrosylation of free cysteine residues, and such modifications are important in mediating NO's biologic activity. Tissue transglutaminase (tTG) is a sulfhydryl rich protein that is expressed by endothelial cells and secreted into the extracellular matrix (ECM) where it is bound to fibronectin. Tissue TG exhibits a Ca(2+)-dependent transglutaminase activity (TGase) that cross-links proteins involved in wound healing, tissue remodeling, and ECM stabilization. Since tTG is in proximity to sites of NO production, has 18 free cysteine residues, and utilizes a cysteine for catalysis, we investigated the factors that regulated NO binding and tTG activity. We report that TGase activity is regulated by NO through a unique Ca(2+)-dependent mechanism. Tissue TG can be poly-S-nitrosylated by the NO carrier, S-nitrosocysteine (CysNO). In the absence of Ca(2+), up to eight cysteines were nitrosylated without modifying TGase activity. In the presence of Ca(2+), up to 15 cysteines were found to be nitrosylated and this modification resulted in an inhibition of TGase activity. The addition of Ca(2+) to nitrosylated tTG was able to trigger the release of NO groups (i.e. denitrosylation). tTG nitrosylated in the absence of Ca(2+) was 6-fold more susceptible to inhibition by Mg-GTP. When endothelial cells in culture were incubated with tTG and stimulated to produce NO, the exogenous tTG was S-nitrosylated. Furthermore, S-nitrosylated tTG inhibited platelet aggregation induced by ADP. In conclusion, we provide evidence that Ca(2+) regulates the S-nitrosylation and denitrosylation of tTG and thereby TGase activity. These data suggest a novel allosteric role for Ca(2+) in regulating the inhibition of tTG by NO and a novel function for tTG in dispensing NO bioactivity.