We investigated the effect of local administration of type-C natriuretic peptide (CNP) on the endothelial dysfunction and development of an atheroma-like neointima induced by a peri-arterial collar in rabbits. 2. Peri-arterial collars were placed on both common carotid arteries allowing local treatment of the collared region with either CNP (10 micromol/L) or saline. After 7 days, uncollared (control) and collared sections were taken from both arteries for pharmacological and morphological analysis. 3. Application of the collar markedly attenuated (P < 0.05) endothelium-dependent vasorelaxation induced by acetylcholine (ACh); inhibition of 5-hydroxytryptamine contraction was 80+/-5% in control sections compared with 44+/-4% in collared sections from the same arteries. Local infusion of CNP (10 micromol/L) into the collar restored ACh-induced vasorelaxation (74+/-3% from collared arteries + CNP vs 77+/-2% from control sections from the same arteries). 4. Type-C natriuretic peptide treatment also reduced (P < 0.05) intimal thickening compared with contralateral collared arteries (intima/media ratio 0.06+/-0.01 vs 0.16+/-0.01). 5. These results provide evidence that locally administered CNP is effective in preventing the endothelial dysfunction and development of a neointima in this model.