Pigment epithelium-derived factor (PEDF) inhibits cytokine-induced endothelial cell activation through its antioxidative properties. However, the effect of PEDF on restenosis remains to be elucidated. Because the pathophysiological feature of restenosis is characterized by increased superoxide formation and accumulation of smooth muscle cells (SMCs), PEDF may inhibit this process via suppression of reactive oxygen species generation. We investigated here whether PEDF could prevent neointimal formation after balloon injury. PEDF levels were decreased in balloon-injured arteries. Adenoviral vector encoding human PEDF (Ad-PEDF) prevented neointimal formation. Expression and superoxide generation of the membrane components of NADPH oxidase, p22(phox) and gp91(phox), in the neointima were also suppressed by Ad-PEDF. Ad-PEDF reduced G(1) cyclin (cyclin D1 and E) expression and increased p27, a cyclin-dependent kinase inhibitor. In vitro, PEDF inhibited platelet-derived growth factor-BB-induced SMC proliferation and migration by blocking reactive oxygen species generation through suppression of NADPH oxidase activity via down-regulation of p22(PHOX) and gp91(PHOX). PEDF down-regulated G(1) cyclins and up-regulated p27 levels in platelet-derived growth factor-BB-exposed SMCs as well. These results demonstrate that PEDF could inhibit neointimal formation via suppression of NADPH oxidase-mediated reactive oxygen species generation. Our present study suggests that substitution of PEDF may be a novel therapeutic strategy for restenosis after balloon angioplasty.