The anti-inflammatory peptide annexin-1 binds to formyl peptide receptors (FPR) but little is known about its mechanism of action in the vasculature. Here we investigate the effect of annexin peptide Ac2-26 on NADPH oxidase activity induced by tumour necrosis factor alpha (TNFα) in human endothelial cells. Superoxide release and intracellular reactive oxygen species (ROS) production from NADPH oxidase was measured with lucigenin-enhanced chemiluminescence and 2',7'-dichlorodihydrofluorescein diacetate, respectively. Expression of NADPH oxidase subunits and intracellular cell adhesion molecule (ICAM-1) and vascular cell adhesion molecule (VCAM-1) were determined by real-time PCR and Western blot analysis. Promoter activity of nuclear factor kappa B (NFκB) was measured by luciferase activity assay. TNFα stimulated NADPH-dependent superoxide release, total ROS formation and expression of ICAM-1and VCAM-1. Pre-treatment with N-terminal peptide of annexin-1 (Ac2-26, 0.5-1.5 µM) reduced all these effects, and the inhibition was blocked by the FPRL-1 antagonist WRW4. Furthermore, TNFα-induced NFκB promoter activity was attenuated by both Ac2-26 and NADPH oxidase inhibitor diphenyliodonium (DPI). Surprisingly, Nox4 gene expression was reduced by TNFα whilst expression of Nox2, p22phox and p67phox remained unchanged. Inhibition of NADPH oxidase activity by either dominant negative Rac1 (N17Rac1) or DPI significantly attenuated TNFα-induced ICAM-1and VCAM-1 expression. Ac2-26 failed to suppress further TNFα-induced expression of ICAM-1 and VCAM-1 in N17Rac1-transfected cells. Thus, Ac2-26 peptide inhibits TNFα-activated, Rac1-dependent NADPH oxidase derived ROS formation, attenuates NFκB pathways and ICAM-1 and VCAM-1 expression in endothelial cells. This suggests that Ac2-26 peptide blocks NADPH oxidase activity and has anti-inflammatory properties in the vasculature which contributes to modulate in reperfusion injury inflammation and vascular disease.