Trypanosoma cruzi infection triggers substantial production of nitric oxide (NO), which has been shown to have protective and toxic effects on the host's immune system. Sensing of trypomastigotes by phagocytes activates the inducible NO-synthase (NOS2) pathway, which produces NO and is largely responsible for macrophage-mediated killing of T. cruzi. NO is also responsible for modulating virtually all steps of innate and adaptive immunity. However, NO can also cause oxidative stress, which is especially damaging to the host due to increased tissue damage. The cytokines IFN-gamma and TNF-alpha, as well as chemokines, are strong inducers of NOS2 and are produced in large amounts during T. cruzi acute infection. Conversely, TGF-beta and IL-10 negatively regulate NO production. Here we discuss the recent evidence describing the mechanisms by which NO is able to exert its antimicrobial and immune regulatory effects, the mechanisms involved in the oxidative stress response during infection and the implications of NO for the development of therapeutic strategies against T. cruzi.