Nitrate assimilation in plants and related organisms is a highly regulated and conserved pathway in which the enzyme nitrate reductase (NR) occupies a central position. Although some progress has been made in understanding the regulation of the protein, transcriptional regulation of the NR gene (NIA1) is poorly understood. This work describes a mechanism for the ammonium-mediated repression of NIA1. We report the characterization of a mutant defective in the repression of NIA1 and NR in response to ammonium and show that a gene (CYG56) coding for a nitric oxide (NO)-dependent guanylate cyclase (GC) was interrupted in this mutant. NO donors, cGMP analogs, a phosphodiesterase inhibitor isobutylmethylxanthine (IBMX), and a calcium ionophore (A23187) repress the expression of NIA1 in Chlamydomonas reinhardtii wild-type cells and also repress the expression of other ammonium-sensitive genes. In addition, the GC inhibitors LY83,583 (6-anilino-5,8-quinolinedione) and ODQ (1H-[1,2,4]oxadiazolo-[4,3-a]quinoxalin-1-one) release cells from ammonium repression. Intracellular NO and cGMP levels were increased in the presence of ammonium in wild-type cells. In the cyg56 mutant, NIA1 transcription was less sensitive to NO donors and A23187, but responded like the wild type to IBMX. Results presented here suggest that CYG56 participates in ammonium-mediated NIA1 repression through a pathway that involves NO, cGMP, and calcium and that similar mechanisms might be occurring in plants.