In this article we analyze the mechanisms by which the C-terminal four amino acids of inducible nitric oxide synthase (NOS2) interact with proteins that contain PDZ (PSD-95/DLG/ZO-1) domains resulting in the translocation of NOS2 to the cellular apical domain. It has been reported that human hepatic NOS2 associates to EBP50, a protein with two PDZ domains present in epithelial cells. We describe herein that NOS2 binds through its four carboxy-terminal residues to CAP70, a protein that contains four PDZ modules that is targeted to apical membranes. Interestingly, this interaction augments both the cytochrome c reductase and .NO-synthase activities of NOS2. Binding of CAP70 to NOS2 also results in an increase in the population of active NOS2 dimers. In addition, CAP70 participates in the correct subcellular targeting of NOS2 in a process that is also dependent on the acylation state of the N-terminal end of NOS2. Hence, nonpalmitoylated NOS2 is unable to progress toward the apical side of the cell despite its interaction with either EBP50 or CAP70. Likewise, if we abrogate the interaction of NOS2 with either EBP50 or CAP70 by fusing the GFP reporter to the carboxy-terminal end of NOS2 palmitoylation is not sufficient to confer an apical targeting.