Repair of arterial injury produced by balloon angioplasty leads to the formation of a neointima and a narrowing of the vascular lumen. In this study, we examined the possibility that smooth muscle cells (SMC) in injured rat carotid arteries are stimulated to produce type-1 transforming growth factor-beta (TGF-beta 1) during neointima formation in vivo. Levels of TGF-beta 1 transcripts (2.4 kb) were significantly increased within 6 h after carotid injury and reached a maximum (five to sevenfold) by 24 h. Regenerating left carotids had sustained increases in TGF-beta 1 mRNA levels (about fivefold) over the next 2 wk, during which time a substantial neointimal thickening was formed. No changes in basal TGF-beta 1 mRNA levels were found in contralateral uninjured carotids at any of the times examined. Immunohistochemical studies showed that a large majority of neointimal SMC were stained for TGF-beta 1 protein in an intracellular pattern, consistent with active TGF-beta 1 synthesis in this tissue. Neointima formation and TGF-beta 1 immunoreactivity were correlated with increases in fibronectin, collagen alpha 2(I), and collagen alpha 1(III) gene expression. Infusion of purified, recombinant TGF-beta 1 into rats with a preexisting neointima produced a significant stimulation of carotid neointimal SMC DNA synthesis. These results suggest that TGF-beta 1 plays an important role as an endogenous growth regulatory factor produced by neointimal SMC themselves during progressive neointimal thickening after balloon angioplasty.