Glucocorticoids remain among the most commonly used anti-inflammatory drugs, despite significant adverse effects. Other anti-inflammatory drugs, including aspirin, have been coupled through an ester linkage to a nitric oxide-releasing moiety, resulting in an increase in potency and a decrease in adverse effects. Prednisolone has similarly been modified, with marked improvement of its therapeutic index. In the present study, we have evaluated whether a nitric oxide-releasing derivative of another glucocorticoid, flunisolide, would increase its potency as an anti-inflammatory agent and would decrease its systemic toxicity. To evaluate anti-inflammatory potency and efficacy, the carrageenan-airpouch model in the rat was used. Flunisolide and NCX-1024 (flunisolide-21-[4'-(nitrooxymethyl) benzoate]) were compared across a range of doses, with both direct injection into the airpouch and oral administration. The ability of these agents to protect the stomach against indomethacin-induced damage also was assessed. Effects of oral administration of the two drugs on body weight gain and adrenal suppression were also evaluated. With direct application into the airpouch, NCX-1024 was found to be 41 times more potent than flunisolide in reducing leukocyte accumulation and prostaglandin E2 generation. The increased potency may be related to an enhanced ability of NCX-1024 to prevent nuclear factor-kappaB activation. When given orally, the two compounds exhibited similar potency. However, orally administered NCX-1024 was more potent at protecting against indomethacin-induced gastric damage, caused less reduction of body weight, and, unlike flunisolide, did not cause adrenal atrophy. These studies suggest that NCX-1024 may be an attractive alternative to conventional glucocorticoids, particularly for applications involving topical administration.