The pathobiologic process of arterial stenosis following balloon angioplasty continues to be an enigmatic problem in clinical settings. This research project investigates the ability of YC-1, a benzyl indazole derivative that sensitizes sGC/cGMP, to stimulate endogenous cGMP and attenuate balloon injury-induced neointima (NI) formation in the rat carotid artery. Northern and Western blot analyses revealed enhanced acute expression of iNOS and inducible heme oxygenase (HO-1) mRNA and protein in the injured artery. The contralateral uninjured artery also demonstrated acute HO-1 mRNA and protein induction without detectable iNOS expression. Perivascular application of YC-1 immediately following injury significantly stimulated acute vessel wall cGMP compared to untreated controls. YC-1 treated sections demonstrated significant reduction in NI area (-74%), NI area/medial wall area (-72%), and NI thickness (-76%) 2 weeks post-injury. These results directly implicate YC-1 as a potent new therapeutic agent capable of reducing post-angioplasty stenosis through endogenous CO- and/or NO-mediated, cGMP-dependent processes.