A20 is a NF-kappaB-dependent gene that has dual anti-inflammatory and antiapoptotic functions in endothelial cells (EC). The function of A20 in smooth muscle cells (SMC) is unknown. We demonstrate that A20 is induced in SMC in response to inflammatory stimuli and serves an anti-inflammatory function via blockade of NF-kappaB and NF-kappaB-dependent proteins ICAM-1 and MCP-1. A20 inhibits SMC proliferation via increased expression of cyclin-dependent kinase inhibitors p21waf1 and p27kip1. Surprisingly, A20 sensitizes SMC to cytokine- and Fas-mediated apoptosis through a novel NO-dependent mechanism. In vivo, adenoviral delivery of A20 to medial rat carotid artery SMC after balloon angioplasty prevents neointimal hyperplasia by blocking SMC proliferation and accelerating re-endothelialization, without causing apoptosis. However, expression of A20 in established neointimal lesions leads to their regression through increased apoptosis. This is the first demonstration that A20 exerts two levels of control of vascular remodeling and healing. A20 prevents neointimal hyperplasia through combined anti-inflammatory and antiproliferative functions in medial SMC. If SMC evade this first barrier and neointima is formed, A20 has a therapeutic potential by uniquely sensitizing neointimal SMC to apoptosis. A20-based therapies hold promise for the prevention and treatment of neointimal disease.