Increased interferon (IFN)-β signaling in patients with insufficient coronary collateralization and an inhibitory effect of IFNβ on collateral artery growth in mice have been reported. The mechanisms of IFNβ-induced inhibition of arteriogenesis are unknown. In stimulated monocytes from patients with chronic total coronary artery occlusion and decreased arteriogenic response, whole genome expression analysis showed increased expression of IFNβ-regulated genes. Immunohistochemically, the IFNβ receptor was localized in the vascular media of murine collateral arteries. Treatment of vascular smooth muscle cells (VSMC) with IFNβ resulted in an attenuated proliferation, cell-cycle arrest, and increased expression of cyclin-dependent kinase inhibitor-1A (p21). The growth inhibitory effect of IFNβ was attenuated by inhibition of p21 by RNA interference. IFNβ-treated THP1 monocytes showed enhanced apoptosis. Subsequently, we tested if collateral artery growth can be stimulated by inhibition of IFNβ-signaling. RNA interference of the IFNβ receptor-1 (IFNAR1) increased VSMC proliferation, cell cycle progression, and reduced p21 gene expression. IFNβ signaling and FAS and TRAIL expression were attenuated in monocytes from IFNAR1(-/-) mice, indicating reduced monocyte apoptosis. Hindlimb perfusion restoration 1 week after femoral artery ligation was improved in IFNAR1(-/-) mice compared with wild-type mice as assessed by infusion of fluorescent microspheres. These results demonstrate that IFNβ inhibits collateral artery growth and VSMC proliferation through p21-dependent cell cycle arrest and induction of monocyte apoptosis. Inhibition of IFNβ stimulates VSMC proliferation and collateral artery growth.