Objective To investigate the function and the mechanism of transplanting bone marrow derived peripheral blood mesenchymal stem cells (PBMSCs) on restenosis after carotid balloon angioplasty in the model of carotid atherosclerosis rabbits and to determine if the functions of PBMSCs are enhanced after hypoxia preconditioning. Methods Bone marrow cells were mobilised by granulocyte colony-stimulating factor (G-CSF), and PBMSCs were connected through density gradient centrifugation and adherent culture, labelled with enhancement type green fluorescent protein (EGFP) genes. All animals with carotid atherosclerosis stenosis were randomly divided into three groups: hypoxia preconditioning group (n=24, received intravenous transplantation of PBMSCs with hypoxia preconditioning), non-hypoxia preconditioning group (n=24, received normal culture of PBMSCs) and control group (n=24, only received equal-volume of culture medium). Vascular endothelial growth factor (VEGF) was determined by enzyme linked immunosorbent assay (ELISA) at 7 d, 14 d and 28 d post-angioplasty, respectively. The vessel morphology, the homing of MSCs and the reendothelialization were analysed with Weigert staining and immunohistochemistry. Results Compared to control group, the level of VEGF significantly increased in both hypoxia preconditioning group and nonhypoxia preconditioning group at all time points (p Conclusions Intravenous transplantation of PBMSCs contributes to the reendothelialization, and attenuates neointima thickening after carotid balloon induced injury in the rabbit model. Further, hypoxia preconditioning may strengthen the above function of MSCs, which is correlated with the increase in cytokines induced by hypoxia preconditioning to MSCs.