The formation of the vertebrate neuromuscular junction (NMJ) depends on the action of neural agrin on the muscle cell. The requirement for agrin and its receptor, muscle-specific kinase (MuSK), has been well established over the past 20 years. However, the signaling mechanisms through which agrin and MuSK cause synaptic differentiation are not well understood. New evidence from studies of muscle cells in culture and in embryos indicates that nitric oxide (NO) is an effector of agrin-induced postsynaptic differentiation at the NMJ. Cyclic GMP (cGMP) production by guanylate cyclase appears to be an important downstream step in this pathway. Nitric oxide and cGMP regulate the activity of several kinases, some of which may influence interaction of dystrophin and utrophin with the actin cytoskeleton to mediate or modulate postsynaptic differentiation in muscle cells. These signaling molecules could also play a role in retrograde signaling to influence differentiation of presynaptic nerve terminals.