We present molecular dynamics simulations of the diffusion coefficients and structure of water-nitric oxide mixtures at ambient (298 K) and in vivo (310 K) conditions. A two-site rigid-body molecular model with partial charges and a Lennard-Jones potential on both sites is proposed for nitric oxide and used in conjunction with the extended simple point-charge model for liquid water in our simulations. The diffusion coefficients obtained from the simulations are in good agreement with experimental data. The results from intermolecular partial pair functions show that under these thermodynamic conditions, the existence of nitric oxide in liquid water has little impact on the structure of water and the tendency to form H bonds between water molecules. We also find that it is unlikely that H bonds form between the hydrogen atoms in water and either the nitrogen or the oxygen atom on the nitric oxide at the temperatures and densities examined in this study. This study suggests that in low concentrations nitric oxide molecules exist as free molecules in liquid water rather than forming complexes with water molecules.