Angiotensin II has been shown by many investigators to be a potent growth factor for vascular smooth cells in culture as well as in vivo. Depending on the conditions, the response of these cells is either hypertrophy or hyperplasia. These observations have important clinical implications, because it has been shown that angiotensin II participates in the hypertrophic response of the vessel wall during hypertension and the hyperplastic response after balloon angioplasty. Thus, an understanding of the molecular mechanism of these responses is important in the development of potential treatment strategies. This review examines the evidence for the growth-promoting properties of angiotensin II, concentrating on these molecular mechanisms. Hypotheses are presented that may explain the bifunctional effects (hypertrophy versus hyperplasia) of angiotensin II. These hypotheses revolve around the interaction of angiotensin with endothelium- and smooth muscle cell-derived products. These autocrine and paracrine interactions play important roles in the modulation of vascular structure.