In recent years numerous data have given evidence that the tissue renin-angiotensin system may play an equal or perhaps an even more important role than the circulating renin-angiotensin system in numerous physiologic processes. This was first suggested by the observation that the blood pressure lowering effect of angiotension-converting enzyme (ACE) inhibitors correlates better with tissue ACE activity than with plasma ACE activity. In response to hypertension and arterial injury, vascular smooth muscle cells undergo three responses: hypertrophy, hyperplasia, and remodeling. The end result is a decrease in lumen diameter and an increase in peripheral vascular resistance. Blockade of angiotensin II formation inhibits these smooth muscle responses in a number of animal models. This review discusses the evidence supporting the existence of local tissue renin-angiotensin system in the vasculature and its physiologic effects. Inhibition of the vascular renin-angiotensin system may have important implications in the treatment of patients with hypertension, atherosclerosis, and restenosis following balloon coronary angioplasty.