Using a Drosophila model, we previously demonstrated truncated life span and neurotoxicity with exposure to 1-octen-3-ol, the volatile organic compound (VOC) responsible for much of the musty odor found in mold-contaminated indoor spaces. In this report, using biochemical and immunological assays, we show that exposure to 0.5 ppm 1-octen-3-ol induces a nitric oxide (NO) mediated inflammatory response in hemocytes, Drosophila innate immune cells. Moreover, exposed Drosophila brains show increased peroxynitrite expression. An increase in nitrite levels is observed with toluene and 1-octen-3-ol but not with 1-butanol. Pharmacological inhibitors of nitric oxide synthase (NOS) namely, L-NAME, D-NAME and minocycline, and NOS mutants show improvements of life span among 1-octen-3-ol exposed flies. Exposure to 1-octen-3-ol also induces NOS expression in larval tracheal tissues and remodels tracheal epithelial lining. These findings suggest a possible mechanistic basis for some of the reported adverse health effects attributed to mold exposure and demonstrates the utility of this in vivo Drosophila model to complement existing model systems for understanding the role of inflammation in VOC-mediated toxicity.