The coronary circulation is controlled by the central nervous system, circulating hormones and local vascular mechanisms. The importance of local regulatory mechanisms has only recently been recognized. The endothelium is in a strategical anatomical position within the blood vessel wall located between the circulating blood and vascular smooth muscle cells. It can respond to mechanical and hormonal signals from the blood; of particular importance is the fact that it is a source of mediators which can modulate the contractile state and proliferative responses of vascular smooth muscle cells, platelet function and coagulation as well as monocyte adhesion. Important relaxing factors are nitric oxide and prostacyclin and a putative hyperpolarizing factor. Nitric oxide also inhibits smooth muscle proliferation and, together with prostacyclin, platelet adhesion and aggregation. Bradykinin-induced nitric oxide production is regulated by angiotensin converting enzyme located on the endothelial cell membrane; indeed, the enzyme not only activates angiotensin I into angiotensin II, but also inactivates bradykinin. Endothelin-1 and thromboxane A2 and prostaglandin H2 are contracting factors produced by the endothelium. In contrast to thromboxane A2 and prostaglandin H2 which activate platelets, endothelin has no direct effects on these cells, but has proliferative properties in vascular smooth muscle. Under physiological conditions, the endothelium plays a protective role as it prevents adhesion of circulating blood cells, keeps the vasculature in a vasodilated state and inhibits vascular smooth muscle proliferation. In disease states, however, endothelial dysfunction contributes to enhanced vasoconstrictor responses, adhesion of platelets and monocytes and proliferation of vascular smooth muscle cells, events all known to occur in coronary artery disease. Nitrates substitute in part for deficient endogenous nitric oxide, while angiotensin converting enzyme inhibitors increase the bradykinin induced nitric oxide and prostacyclin production. The newly developed endothelin antagonists allow specific blocking of the effects of endothelin. Pharmacological correction of endothelial dysfunction may be important to treat coronary artery disease and its complications.