By the formation of cGMP the NO-sensitive guanylyl cyclase plays a key role within the NO/cGMP signaling cascade involved in vascular regulation and neurotransmission. The prosthetic heme group of the enzyme acts as the NO sensor, and binding of NO induces conformational changes leading to an up to 200-fold activation of the enzyme. The unexpected fast dissociation half-life of NO of a few seconds is fast enough to account for the deactivation of the enzyme in biological systems. YC-1 and its analogues acting as NO sensitizers uncovered a new pharmacologically and conceivably physiologically relevant regulatory principle of the enzyme.

Two existing isoforms of the heterodimeric guanylyl cyclase (α₁β₁, α₂β₁) are known that are functionally indistinguishable. Up to now, the NO-sensitive guanylyl cyclase has been considered as a soluble enzyme. However, recent evidence about the α₂β₁ isoform interacting with a PDZ domain of the postsynaptic scaffold protein PSD-95 suggests that the α₂ subunit directs a membrane association of this isoform. The interaction with PSD-95 locates the α₂β₁ isoform in close proximity to the NO-generating NO synthase thereby enabling the NO sensor to respond to locally raised NO concentrations.