Proteolytic cleavage of the tumor necrosis factor (TNF) receptor (TNFR) from the cell surface contributes to anti-inflammatory responses and may be beneficial in reducing the excessive inflammation associated with multiple organ failure and mortality during sepsis. Using a clinically relevant mouse model of polymicrobial abdominal sepsis, we found that the production of inducible nitric oxide synthase (iNOS) in hepatocytes led to the cyclic guanosine monophosphate (cGMP)-dependent activation of the protease TACE (TNF-converting enzyme) and the shedding of TNFR. Furthermore, treating mice with a cGMP analog after the induction of sepsis increased TNFR shedding and decreased systemic inflammation. Similarly, increasing the abundance of cGMP with a clinically approved phosphodiesterase 5 inhibitor (sildenafil) also decreased markers of systemic inflammation, protected against organ injury, and increased circulating amounts of TNFR1 in mice with sepsis. We further confirmed that a similar iNOS-cGMP-TACE pathway was required for TNFR1 shedding by human hepatocytes in response to the bacterial product lipopolysaccharide. Our data suggest that increasing the bioavailability of cGMP might be beneficial in ameliorating the inflammation associated with sepsis.