We have reported that thyroid capsular thickening with inflammation induced by an antithyroidal agent, sulfadimethoxine (SDM), might play a role in the development of invasive follicular carcinomas in rats initiated with N-bis(2-hydroxypropyl)nitrosamine (DHPN). Inducible nitric oxide synthase (iNOS) expressed in the inflamed capsular regions further appeared to be implicated in the tumor progression. In the present study, the effects of an iNOS inhibitor, aminoguanidine (AG), on thyroid carcinogenesis were examined. F344 male rats were treated with SDM in drinking water (0.1%) with or without concomitant dietary administration of AG (0.2%) for 4 and 10 weeks after subcutaneous injection of DHPN at 2800 mg/kg bodyweight. At week 4, thyroid capsular thickening with inflammation was observed and iNOS-positive foci were found in the inflamed regions. In addition, single-strand DNA-positive inflammatory cells were scattered among neighboring follicular cells, indicating some cellular damage, at least partly in association with iNOS induction. Concurrent dietary administration of AG with SDM treatment slightly decreased the number of single-strand DNA-positive cells but did not alter the incidence and multiplicity of iNOS-positive foci in the inflamed capsular regions at week 4. At week 10, however, invasive follicular carcinomas predominantly arose in the thickened capsule in the DHPN-SDM-treated rats, and AG administration decreased (P < 0.05) their multiplicity. The carcinoma cells were partly positive for iNOS. These results thus suggested that iNOS induction in both inflammatory and tumor cells might play pivotal roles in tumor progression in this DHPN-SDM rat model.