The purpose of this study was to determine the mechanism by which hydrogen peroxide (H(2)O(2)), an important inflammatory mediator, relaxes canine tracheal smooth muscle (CTSM). H(2)O(2) caused concentration-dependent relaxations of CTSM strips contracted with ACh or isotonic KCl [EC(50) of 0.24 +/- 0.04 (SE) and 0.23 +/- 0.04 mM, respectively]. Indomethacin (10 microM) decreased the sensitivity of both KCl- and ACh-contracted strips to H(2)O(2). H(2)O(2) increased intracellular cAMP levels, an increase that was abolished by indomethacin. H(2)O(2) did not affect intracellular cGMP levels. In strips treated with indomethacin and contracted with ACh or isotonic KCl, H(2)O(2)-evoked relaxations were accompanied by increases in intracellular Ca(2+) concentration and decreases in regulatory myosin light chain phosphorylation. We conclude that H(2)O(2) decreases Ca(2+) sensitivity in CTSM by decreasing regulatory myosin light chain phosphorylation through inhibition of myosin light chain kinase and/or activation of smooth muscle protein phosphatases.