Abnormal proliferation of vascular smooth muscle cells (VSMCs) contributes to intimal hyperplasia during atherosclerosis and restenosis, but the endogenous cell cycle regulatory factors underlying VSMC growth in response to arterial injury are not well understood. In the present study, we report that downregulation of cyclin-dependent kinase 2 (cdk2) activity in serum-deprived VSMCs was associated with the formation of complexes between cdk2 and its inhibitory protein p27(KIP1) (p27). Ectopic overexpression of p27 in serum-stimulated VSMCs resulted in the inhibition of cdk2 activity and repression of cyclin A promoter activity. Collectively, these findings indicate that p27 may contribute to VSMC growth arrest in vitro. Using the rat carotid model of balloon angioplasty, a marked upregulation of p27 was observed in injured arteries. High levels of p27 expression in the media and neointima correlated with downregulation of cdk2 activity at 2 wk after angioplasty, and adenovirus-mediated overexpression of p27 in balloon-injured arteries attenuated neointimal lesion formation. Thus, the inhibition of cdk2 function and repression of cyclin A gene transcription through the induction of the endogenous p27 protein provides a mechanism for the inhibition of VSMC growth at late time points after angioplasty.