The pathway by which inhaled NO gas enters pulmonary alveolar epithelial cells has not been directly tested. Although the expected mechanism is diffusion, another route is the formation of S-nitroso-L-cysteine, which then enters the cell through the L-type amino acid transporter (LAT). To determine if NO gas also enters alveolar epithelium this way, we exposed alveolar epithelial-rat type I, type II, L2, R3/1, and human A549-cells to NO gas at the air liquid interface in the presence of L- and D-cysteine+/-LAT competitors. NO gas exposure concentration dependently increased intracellular NO and S-nitrosothiol levels in the presence of L- but not D-cysteine, which was inhibited by LAT competitors, and was inversely proportional to diffusion distance. The effect of L-cysteine on NO uptake was also concentration dependent. Without preincubation with L-cysteine, NO uptake was significantly reduced. We found similar effects using ethyl nitrite gas in place of NO. Exposure to either gas induced activation of soluble guanylyl cylase in a parallel manner, consistent with LAT dependence. We conclude that NO gas uptake by alveolar epithelium achieves NO-based signaling predominantly by forming extracellular S-nitroso-L-cysteine that is taken up through LAT, rather than by diffusion. Augmenting extracellular S-nitroso-L-cysteine formation may augment pharmacological actions of inhaled NO gas.