Objective: In the development of neointimal hyperplasia (a major cause of restenosis), inflammation is known to play a central role. Thalidomide, due to its potent anti-inflammatory and immunomodulatory properties is being re-evaluated in several clinical fields. Therefore, we examined whether thalidomide affects neointimal overgrowth. Methods and Results: Male Sprague-Dawley rats, pretreated with thalidomide (100mg/kg) for 3 days by gavage, underwent carotid artery balloon angioplasty. Then the administration of thalidomide was continued for 2weeks after the injury. Systemic inflammatory marker (serum TNF-慣, measured by ELISA) was significantly reduced 3 and 14 days after injury in the thalidomide-treated animals versus the controls (856짹213 vs 449짹68 pg/ml, day3, P=0.001; 129짹34 vs 63짹18 pg/ml, day14, P=0.001). And this effect was accompanied by marked decreases in the arterial macrophage infiltration (19.6짹3.1 % of total cells in control vs 4.3짹2.2 % in thalidomide-treated rats, P=0.021) and by significantly attenuated expressions of TNF-慣 and bFGF in the arteries, which were measured as local tissue inflammatory indicators by immunostaining and Western blot. The anti-proliferative effect of thalidomide treatment was confirmed by a reduced number of PCNA-positive vascular smooth muscle cells in the arteries (43.1짹2.9 vs 7.4짹1.7 %, day14, P<0.001). Morphometric analysis 2 weeks after injury revealed that much larger luminal area in the thalidomide-treated rats (0.17짹0.04 vs 0.05짹0.02 mm², P=0.001) was achieved mainly through the suppression of neointimal hyperplasia (neointima-to-media[N/M] ratio, 0.35짹0.13 vs 1.26짹0.29, P<0.001) rather than blocking negative remodeling (remodeling index,1.08짹0.09 vs 1.06짹0.10, P=0.89). Moreover, a strong positive correlation was observed between the serum TNF-慣 level and the N/M ratio (P<0.001). Conclusion: Thalidomide, through its anti-inflammatory and anti-proliferative effect, significantly inhibits neointimal hyperplasia in injured rat carotid arteries. Based upon these findings thalidomide can be applied in various ways such as new drug-eluting-stent agent or systemic oral drug againt the development of restenosis.