Tissue factor (TF) and thrombin are involved in intimal hyperplasia (IH) and remodelling following vascular injury. Because many neointimal smooth muscle cells (VSMCs) derive from circulating vascular progenitors (VPs), we investigated how thrombin influences VP phenotype and function. Following wire-induced carotid artery injury in mice, the majority of circulating VPs expressed TF, were capable of initiating clotting in vitro, and had protease-activated receptors (PAR)-1, -2, and -4. Thrombin, through PAR-1, inhibited apoptosis and caused proliferation, resulting in the outgrowth of VP coexpressing markers of activated endothelial cells and VSMCs, even in the presence of growth factors. These mixed-phenotype VPs circulated as a minority population after injury and shared a similar phenotype with many neointimal cells. Labeled CD34(+) cells, injected up to 2 weeks after injury, could be detected in the injured vessel wall, suggesting that continued recruitment may contribute to progressive IH. Finally, CD34(+) cells incubated with thrombin prior to injection promoted florid neointimal lesions, whereas those incubated with PAR antagonists inhibited IH and promoted regenerative repair characterized by the development of a quiescent endothelium. We conclude that IH after vascular injury is due to the direct actions of thrombin on mobilized VPs.