The redox-sensitive tetrahydrobiopterin (BH 4 ) is an essential cofactor that is required by endothelial Nitric Oxide Synthase (eNOS) for L-arginine (ARG) mediated Nitric Oxide (NO) generation. Oxidation of BH 4 causes cofactor insufficiency and uncoupling of eNOS, resulting in product switching from NO to O 2•¯ production. Here we tested the hypothesis that eNOS uncoupling is not simply a consequence of BH 4 insufficiency, but rather results from a diminished ratio of BH 4 versus its catalytically incompetent oxidation product, 7,8-dihydrobiopterin (BH 2 ). Human Umbilical Vein Endothelial Cells (HUVEC) were incubated for 2 h in Locke's buffer with 100 µM ARG with or without other agents for 2 h (acute) or in medium for 7 days and challenged in buffer for 2 h (chronic). eNOS activity was determined by cellular accumulation of nitrite/nitrate and its expression was measured using ELISA method. Dihydroethidium fluorescence technique was used to measure O 2•¯ accumulation. For binding studies, cell extracts were quantified for levels of BH 4 , BH 2 , quinonoid isoform of BH 2 (qBH 2 ) and biopterin using a modified HPLC method. [3 H]BH 4 binding studies revealed BH 4 and BH 2 bind eNOS with equal affinity and BH 2 can efficiently replace BH 4 in preformed eNOS-BH 4 complexes. While the total pterin pool of HUVEC was unaffected by chronic (7 days) exposure to ARG, BH 2 levels increased from undetectable to 40% of total pterin. This BH 2 accumulation was associated with diminished NO activity and accelerated O 2 •¯ production. Reciprocally, O 2•¯ production was found to negatively correlate with intracellular ratio of BH 4 -to-BH 2 . Our findings implicate intracellular BH 4 -to-BH 2 ratio, not simply BH 4 amount, as a critical in vitro determinant of eNOS product formation during continuous ARG supplementation. Accordingly, diminished ratio of BH 4 -to-BH 2 is likely to be the fundamental molecular link between oxidative stress and endothelial dysfunction during ARG mediated tolerance development.