Heme oxygenase (HO-1, encoded by Hmox1) is an inducible protein activated in systemic inflammatory conditions by oxidant stress. Vascular injury is characterized by a local reparative process with inflammatory components, indicating a potential protective role for HO-1 in arterial wound repair. Here we report that HO-1 directly reduces vasoconstriction and inhibits cell proliferation during vascular injury. Expression of HO-1 in arteries stimulated vascular relaxation, mediated by guanylate cyclase and cGMP, independent of nitric oxide. The unexpected effects of HO-1 on vascular smooth muscle cell growth were mediated by cell-cycle arrest involving p21Cip1. HO-1 reduced the proliferative response to vascular injury in vivo; expression of HO-1 in pig arteries inhibited lesion formation and Hmox1-/- mice produced hyperplastic arteries compared with controls. Induction of the HO-1 pathway moderates the severity of vascular injury by at least two adaptive mechanisms independent of nitric oxide, and is a potential therapeutic target for diseases of the vasculature.