Soluble guanylate cyclase (sGC) uses a ferrous heme cofactor as a receptor for NO and once bound activates the enzyme for the conversion of GTP to cGMP. The heme cofactor in sGC does not bind oxygen, thereby allowing it to selectively bind NO despite a cellular concentration of oxygen (microM) that is much higher than signaling concentrations of nitric oxide (nM). The molecular details of this ligand discrimination against oxygen have emerged and allowed for predictions regarding ligand specificity in the sGC family. The results reported here show that Gyc-88E from Drosophila is a hemoprotein that binds oxygen, as well as NO and CO. All three ligands form 6-coordinate complexes. Gyc-88E is active as a homodimer (5600 +/- 243 nmol min(-1) mg(-1)) and is inhibited by O2, CO, and NO (3.2-, 2.9-, and 2-fold, respectively). The Km for GTP was 0.66 +/- 0.15 mM in air (273 microM oxygen) and 0.82 +/- 0.15 mM under anaerobic conditions. The Ki for oxygen was calculated to be 51 +/- 28 microM. The biochemical properties of Gyc-88E are unique for guanylate cyclases and suggest a possible function as an oxygen sensor.