Background: It has been suggested that reendothelialization of damaged blood vessels protects against the vascular injury response. The goal of the present study was to determine whether estrogen restores endothelial cell function in balloon-injured rat carotid arteries. Methods and Results: Ten- week-old male and female Sprague-Dawley rats with intact gonads underwent balloon injury to the right common carotid artery. Female rats were randomized to receive either daily subcutaneous injections of 17β-estradiol (17βE2; 20 μg · kg-1 · d-1) or vehicle over the course of the study. Vessel morphology was assessed 2 weeks after injury. Significant neointima formation was observed in vehicle-treated males. This response was blunted in vehicle-treated and 17β-E2-supplemented females. Intima-to-media ratios were 1.28±0.23 (males). 0.72±0.07 (vehicle-treated females), and 0.49±0.07 (17β-E2-supplemented females). To test whether reductions in neointimal lesion formation were related to the functional reendothelialization of the damaged vessel, endothelium-dependent relaxation was tested in isolated ring segments from the three experimental groups. Vessels were precontracted with phenylephrine followed by cumulative administration of accytcholine, an endothelium-dependent vasodilator. Maximum relaxation to acetylcholine was 8.13±1.70% (males), 22.06±4.36% (vehicle-treated females), and 46.47±3.48% (17β-E2-supplemented females). The enhanced endothelium-dependent relaxation of rings from 17βE2-supplemented females correlated with reduced neointimal proliferation in this group. The concentration of nitric oxide metabolites in plasma correlated positively with plasma 17β-E2 concentration. Conclusions: These results suggest that estrogen protects against neointimal injury in the balloon-injured rat, at least in part, by facilitating the reendothelialization of the damaged vessel.