The endothelium plays an important role in maintaining vascular homeostasis by synthesizing and releasing several endothelium-derived relaxing factors, such as prostacyclin, nitric oxide (NO), and the previously unidentified endothelium-derived hyperpolarizing factor (EDHF). In this study, we examined our hypothesis that hydrogen peroxide (H₂O₂) derived from endothelial NO synthase (eNOS) is an EDHF. EDHF-mediated relaxation and hyperpolarization in response to acetylcholine (ACh) were markedly attenuated in small mesenteric arteries from eNOS knockout (eNOS-KO) mice. In the eNOS-KO mice, vasodilating and hyperpolarizing responses of vascular smooth muscle per se were fairly well preserved, as was the increase in intracellular calcium in endothelial cells in response to ACh. Antihypertensive treatment with hydralazine failed to improve the EDHF-mediated relaxation. Catalase, which dismutates H₂O₂ to form water and oxygen, inhibited EDHF-mediated relaxation and hyperpolarization, but it did not affect endothelium-independent relaxation following treatment with the K⁺ channel opener levcromakalim. Exogenous H₂O₂ elicited similar relaxation and hyperpolarization in endothelium-stripped arteries. Finally, laser confocal microscopic examination with peroxide-sensitive fluorescence dye demonstrated that the endothelium produced H₂O₂ upon stimulation by ACh and that the H₂O₂ production was markedly reduced in eNOS-KO mice. These results indicate that H₂O₂ is an EDHF in mouse small mesenteric arteries and that eNOS is a major source of the reactive oxygen species.