Arterial injury by a balloon catheter produces marked smooth muscle cell proliferation and the participation of angiotensin II in this response has been suggested. In this study, we examined the effect of a novel angiotensin II type I receptor antagonist, TCV-116, on neointimal formation after rat carotid artery balloon injury. Oral administration of TCV-116 at doses of 1, 5 or 10 mg/kg/day significantly reduced the cross-sectional intimal area by 30%, 46% and 54%, respectively, and reduced the ratio of the intimal to medial cross-sectional areas by 23%, 41% and 50%. An angiotensin-converting enzyme inhibitor, lisinopril, had an effect similar to that of TCV-116. The effect of both drugs was significantly correlated with the reduction of both blood pressure and cardiac hypertrophy. We conclude that TCV-116 can prevent neointimal formation after balloon injury as well as reducing blood pressure and preventing cardiac hypertrophy.