Intimal hyperplasia in blood vessels is primarily caused by the migration and proliferation of vascular smooth muscle cells. Excessive intimal thickening characterizes atherosclerosis as well as bypass graft and angioplasty failures. Endothelial cell-smooth muscle cell interactions and local cytokine production are important regulators of smooth muscle cell growth. Interferon gamma (gamma-IFN), a product of T lymphocytes found in atherosclerotic lesions, inhibits smooth muscle cell proliferation in vitro. To determine if local delivery of gamma-IFN may be useful in the treatment or prevention of vascular proliferative diseases, we transferred the human gamma-IFN gene into endothelial cells isolated from human arteries and microvessels using a retroviral vector, Biologically active gamma-IFN was produced and secreted by gamma-IFN transduced endothelial cells, but not by control, nontransduced cells, or cells identically transduced with E. coli beta galactosidase (beta-gal). To more closely approximate the microenvironment of blood vessels, subconfluent smooth muscle cells were plated in coculture with control, nontransduced endothelial cells, gamma-IFN transduced endothelial cells, or beta-gal transduced endothelial cells. Smooth muscle cell growth was inhibited 30-70% by coculture with gamma-IFN transduced endothelial cells compared to coculture with beta-gal transduced or control endothelial cells (p < 0.05), Our results suggest endothelial cells modified to produce gamma-IFN may be a useful therapy in proliferative vascular diseases. Copyright (C) 1997 Elsevier Science Inc.