The atherosclerotic plaque is composed of vascular smooth muscle cells and of macrophages and lymphocytes derived from the blood. We have recently shown that smooth muscle cells express class II MHC (Ia) antigens in the atherosclerotic plaque but not in the normal vessel wall. In the present study, we have tested whether there is a relationship between arterial injury and smooth muscle Ia expression. Rat carotid arteries were deendothelialized with a balloon catheter, and the rat Ia antigens, I-A and I-E, were detected by immunocytochemistry. Leukocytes and smooth muscle cells were identified by monoclonal antibodies to cell type-specific antigens. Normal rat carotids were always I-A and I-E negative, but approximately 10% of the cells became I-A-positive and 5% I-E positive during the response to injury. Ia expression was limited to non-replicating smooth muscle cells, suggesting that Ia is expressed as part of an activation response in a nondividing subfraction of the cells. The frequency of Ia-positive smooth muscle cells was maximal at 2 weeks postinjury, which coincided with maximal leukocyte infiltration and with the appearance of T lymphocytes in the neointima. This suggests that T cells induce Ia expression in smooth muscle cells. This was confirmed in cell culture experiments, where conditioned media from activated T lymphocytes induced Ia antigens in arterial smooth muscle cells. A similar induction of Ia expression was induced by recombinant gamma interferon, suggesting that this lymphokine may be responsible for smooth muscle Ia expression also in vivo.