RATIONALE:: Increased arginase activity contributes to endothelial dysfunction by competition for L-arginine substrate and reciprocal regulation of nitric oxide synthase (NOS). The rapid increase in arginase activity in human aortic endothelial cells exposed to oxidized low-density lipoprotein (OxLDL) is consistent with post-translational modification or subcellular trafficking. OBJECTIVE:: To test the hypotheses that OxLDL triggers reverse translocation of mitochondrial arginase 2 (Arg2) to cytosol and Arg2 activation, and that this process is dependent on mitochondrial processing peptidase, lectin-like OxLDL receptor-1 receptor, and rho kinase. METHODS AND RESULTS:: OxLDL-triggered translocation of Arg2 from mitochondria to cytosol in human aortic endothelial cells and in murine aortic intima with a concomitant rise in arginase activity. All of these changes were abolished by inhibition of mitochondrial processing peptidase or by its siRNA-mediated knockdown. Rho kinase inhibition and the absence of the lectin-like OxLDL receptor-1 in knockout mice also ablated translocation. Aminoterminal sequencing of Arg2 revealed 2 candidate mitochondrial targeting sequences, and deletion of either of these confined Arg2 to the cytoplasm. Inhibitors of mitochondrial processing peptidase or lectin-like OxLDL receptor-1 knockout attenuated OxLDL-mediated decrements in endothelial-specific NO production and increases in superoxide generation. Finally, Arg2 mice bred on an ApoE background showed reduced plaque load, reduced reactive oxygen species production, enhanced NO, and improved endothelial function when compared with ApoE controls. CONCLUSIONS:: These data demonstrate dual distribution of Arg2, a protein with an unambiguous mitochondrial targeting sequence, in mammalian cells, and its reverse translocation to cytoplasm by alterations in the extracellular milieu. This novel molecular mechanism drives OxLDL-mediated arginase activation, endothelial NOS uncoupling, endothelial dysfunction, and atherogenesis. © 2014 American Heart Association, Inc.