The proliferation of smooth muscle cells (SMC) seen in hypoxic pulmonary hypertension is a poorly understood phenomenon but may involve endothelial cell (EC)-SMC interaction. Using bovine pulmonary artery cells, we examined the effect of O2 tension and the role of EC or media conditioned by EC (ECCM) on SMC proliferation. We found no difference in SMC proliferation under 3%, 10%, and 20% O2. EC, co-cultured with SMC in 3% O2, inhibited SMC proliferation consistently by about 40% (versus SMC exposed to hypoxia but not to EC). In normoxia, the degree of inhibition was dependent on EC:SMC ratio. In separate experiments, media from EC exposed to 3% or 20% O2 had a mitogenic activity of 24% and 42%, respectively (compared to 100% mitogenic activity with 5% FCS), on serum-deprived SMC. On the other hand, when SMC were stimulated to grow with FCS, an inhibitory activity (IA) from ECCM on SMC proliferation was observed and was significantly greater in hypoxic versus normoxic ECCM (40% versus 21%, respectively). Amicon concentration showed that the IA was contained in the less than 10 kD fraction of ECCM. Preliminary characterization of this IA indicates that it is unlike any of the known inhibitors of SMC growth, such as lactic acid, prostaglandin derivatives, or heparan sulfate. We conclude that hypoxia causes pulmonary artery EC to release a unique inhibitor of SMC growth.