The nitric oxide-cyclic GMP (NO-cGMP) pathway mediates important physiological functions associated with various integrative body systems including the cardiovascular and nervous systems. Furthermore, NO regulates cell growth, survival, apoptosis, proliferation, and differentiation at the cellular level. To understand the significance of the NO-cGMP pathway in development and differentiation, studies have been conducted both in developing embryos and in stem cells. Manipulation of the NO-cGMP pathway, by employing activators and inhibitors as pharmacological probes, and genetic manipulation of NO signaling components have implicated the involvement of this pathway in the regulation of stem cell differentiation. This review focuses on some of the work pertaining to the role of NO-cGMP in the differentiation of stem cells into cells of various lineages, particularly into myocardial cells, and in stem cell-based therapy.