Vessel injury results in the elaboration of various cytokines, including tumor necrosis factor-alpha (TNF-alpha), which may influence vascular smooth muscle cell (VSMC) function and contribute to atherogenesis. We tested the hypothesis that TNF-alpha-induced VSMC proliferation requires activation of the transcription factor nuclear factor-kappaB (NF-kappaB), which could be prevented by delivery of the NF-kappaB inhibitory peptide, IkappaBalpha. TNF-alpha induced concentration-dependent human VSMC proliferation, and neutralizing antibody to interleukin-6 reduced TNF-alpha-induced VSMC proliferation by 65%. In TNF-alpha-stimulated VSMCs, there was a 3-fold increase in NF-kappaB-dependent luciferase reporter activity that was associated with degradation of IkappaBalpha. To determine an essential role for NF-kappaB in TNF-alpha-induced VSMC proliferation, recombinant IkappaBalpha was introduced into VSMCs via liposomal delivery. Under these conditions, TNF-alpha-induced NF-kappaB nuclear translocation and DNA binding were inhibited, NF-kappaB-dependent luciferase activity was reduced by 50%, there was no degradation of native IkappaBalpha detected, interleukin-6 production was reduced by 54%, and VSMC proliferation was decreased by 60%. In conclusion, the mitogenic effect of TNF-alpha on human arterial VSMCs is dependent on NF-kappaB activation and may be prevented by exogenously delivered IkappaBalpha. Furthermore, liposomal delivery of endogenous inhibitory proteins may represent a novel, therapeutically accessible method for selective transcriptional suppression in the response to vascular injury.