Nitric oxide (NO), produced via inducible NO synthase (iNOS), can modulate polarized epithelial processes such as solute transport. Given the high reactivity of NO, we hypothesized that optimal NO regulation of polarized epithelial functions is achieved through compartmentalization of iNOS, allowing local NO delivery to its molecular targets. Here, we show that iNOS localizes to the apical domain of epithelial cells within a submembranous protein complex tightly bound to cortical actin. We further show that iNOS can bind to the apical PDZ protein, EBP50 (ezrin-radixin-moesin-binding phosphoprotein 50), an interaction that is dependent on the last three COOH-terminal amino acids of iNOS, SAL, but requires the presence of additional unknown cellular proteins. Mutation of these three COOH-terminal residues abolishes the iNOS-EBP50 interaction and disrupts the apical association of iNOS in transfected cells, showing that this COOH-terminal motif is essential for the correct localization of iNOS in epithelial cells. Apically localized iNOS directs vectorial NO production at the apical proximal tubule epithelial cell surface. These studies define human epithelial iNOS as an apical EBP50-binding protein and suggest that the physical association of iNOS with EBP50 might allow precise NO modulation of EBP50-associated protein functions.