Angiotensin II (Ang II), the dominant effector of the renin-angiotensin system, regulates numerous inflammatory-proliferative responses in vascular wall cells and is thus involved in atherosclerosis. We have previously shown that pigment epithelium-derived factor (PEDF) inhibits advanced glycation end-product-induced pericyte apoptosis, thereby exerting beneficial effects on diabetic retinopathy. However, a role for PEDF in vascular inflammation and atherosclerosis remains to be elucidated. In this study, we have examined whether PEDF inhibits the Ang-II-induced endothelial cell (EC) activation in vitro and the way that it might achieve this effect. Ang II significantly induced redox-sensitive transcriptional factor NF-kappaB activation and subsequent monocyte chemoattractant protein-1 expression in human umbilical vein ECs (HUVEC), both of which were completely inhibited by PEDF or the anti-oxidant N-acetylcysteine. PEDF or diphenylene iodonium, an inhibitor of NADPH oxidase, inhibited Ang-II-induced intracellular reactive oxygen species (ROS) generation in HUVEC. Furthermore, PEDF inhibited Ang-II-induced up-regulation of mRNA levels of p22phox, Nox4, and gp91phox/Nox2, which are membrane components of NADPH oxidase, and its enzymatic activity in HUVEC. Antisense, but not sense, DNAs against p22phox, Nox4, or gp91phox/Nox2 were found significantly to inhibit Ang-II-induced ROS generation in HUVEC. These results demonstrate that PEDF inhibits Ang-II-induced EC activation by suppressing NADPH-oxidase-mediated ROS generation and that PEDF may play a protective role in the development and progression of atherosclerosis.