Inhaled nitric oxide (NO) therapy has been reported to improve lung growth in premature newborns. However, the underlying mechanisms by which NO regulates lung development remain largely unclear. NO is enzymatically produced by three isoforms of nitric oxide synthase (NOS) enzymes. NOS knockout mice are useful tools to investigate NO function in the lung. Each single NOS knockout mouse does not show obvious lung alveolar phenotype, likely due to compensatory mechanisms. While mice lacking all three NOS isoforms display impaired lung alveolarization, implicating NO plays a pivotal role in lung alveolarization. Argininosuccinate lyase (ASL) is the only mammalian enzyme capable of synthesizing L-arginine, the sole precursor for NOS-dependent NO synthesis. ASL is also required for channeling extracellular L-arginine into a NO-synthetic complex. Thus, ASL deficiency (ASLD) is a non-redundant model for cell-autonomous, NOS-dependent NO deficiency. Here, we assessed lung alveolarization in ASL-deficient mice. Hypomorphic deletion of Asl (AslNeo/Neo) results in decreased lung alveolarization, accompanied with reduced level of S-nitrosylation in the lung. Genetic ablation of one copy of Caveolin-1, which is a negative regulator of NO production, restores total S-nitrosylation as well as lung alveolarization in AslNeo/Neo mice. Importantly, NO supplementation could partially rescue lung alveolarization in AslNeo/Neo mice. Furthermore, endothelial-specific knockout mice (VE-Cadherin Cre; Aslflox/flox) exhibit impaired lung alveolarization at 12weeks old, supporting an essential role of endothelial-derived NO in the enhancement of lung alveolarization. Thus, we propose that ASLD is a model to study NO-mediated lung alveolarization.