This study investigated the vasodilator function of endothelium that regenerated after balloon angioplasty and the relation of this function to the extent of vascular injury and to subsequent intimal proliferation. Balloon angioplasty was performed in the left iliac artery of 47 New Zealand White rabbits. Vascular responses were examined in vitro 2 and 4 weeks after a "severe" injury (3.0-mm balloon) or a "moderate" injury (2.5-mm balloon). Both degrees of balloon injury caused complete endothelial denudation. Endothelial regrowth 2 weeks after either injury was confirmed histologically. Although the regenerated cells had irregular sizes and polygonal shapes and lacked the typical alignment in the direction of blood flow, immunocytochemical staining for factor VIII-related antigen identified these cells as endothelium. To study the vasodilator function of regenerated endothelium, rings of balloon-injured and control (contralateral) iliac arteries were suspended in organ chambers for recording of isometric force. Endothelium-dependent relaxation of balloon-injured vessels to acetylcholine and to the calcium ionophore A23187 were reduced at 2 and at 4 weeks after severe injury. After moderate injury, endothelium-dependent relaxations to these agents were reduced at 2 weeks but had normalized by 4 weeks. Endothelium-independent relaxation to sodium nitroprusside, however, was preserved in all study groups. Morphometric analysis revealed an inverse correlation between the degree of intimal thickening and maximal relaxation to acetylcholine (r = 0.45, p less than 0.01). Thus, there is a persistent attenuation of receptor- and nonreceptor-mediated endothelium-dependent relaxations after arterial injury. The regenerated cells have an altered morphological appearance, but staining for factor VIII-related antigen confirms their endothelial origin. The degree and duration of endothelial dysfunction depends on the severity of the initial injury and is related to the extent of intimal thickness.