TNFα is produced in significant quantities during endotoxemia and can induce liver cell apoptosis. Type 1 TNF-receptor (TNFR1) can be cleaved from the cell surface by TACE/ADAM17 allowing binding to excess TNF, and reducing liver damage, although the mechanism of TACE activation is unknown. Inducible nitric oxide synthase (iNOS) is also hepatoprotective during endotoxemia. The aim of this study was to identify whether iNOS-dependent signaling regulates TACE activation and TNFR1-shedding for hepatocellular protection. Primary mouse hepatocytes were isolated from C57BL/6 mice and treated for 12h with LPS (100ng/mL) and NO donor SNAP (80μM). TACE activity and soluble TNFR1(sTNFR1) levels in culture media significantly increased after just 30min with LPS/SNAP compared to controls (p=0.002). Both iNOS inhibitor (1400W–2.5μM) and soluble guanylate cyclase inhibitor (ODQ-20μM) blocked TACE activity and TNFR1-shedding. Conversely, hepatocytes treated with cell-permeable cGMP-analog (8-Br-cGMP-800μM) had significantly increased TACE activity and sTNFR1 after 30min compared with untreated controls (p=0.015). This increase in sTNFR1 was significantly reduced after addition of either ODQ or Protein Kinase G-inhibitor (PKG-inhibitor-20μM). Coimmunoprecipitation experiments revealed iNOS, activated TACE, TNFR1 and PKG are mutually associated at the hepatocyte membrane after stimulation with LPS, and this association is required for TACE activation. Furthermore, treatment of protein extracts with ODQ, PKG inhibitor or TAPI-1 (TACE inhibitor) prevented formation of the complex. Taken together our findings suggest that iNOS-derived cGMP induces the shedding of cell surface TNFR1 through the formation of a multi-protein membrane-associated complex. These data shed light on the mechanism of hepatoprotection by iNOS during infection and inflammation.