Platelet-derived growth factor (PDGF) is a potent mitogenic and migratory factor that regulates the tyrosine phosphorylation of a variety of signalling proteins via intracellular production of H2O2 (refs 1, 2-3). Mammalian 2-Cys peroxiredoxin type II (Prx II; gene symbol Prdx2) is a cellular peroxidase that eliminates endogenous H2O2 produced in response to growth factors such as PDGF and epidermal growth factor; however, its involvement in growth factor signalling is largely unknown. Here we show that Prx II is a negative regulator of PDGF signalling. Prx II deficiency results in increased production of H2O2, enhanced activation of PDGF receptor (PDGFR) and phospholipase Cgamma1, and subsequently increased cell proliferation and migration in response to PDGF. These responses are suppressed by expression of wild-type Prx II, but not an inactive mutant. Notably, Prx II is recruited to PDGFR upon PDGF stimulation, and suppresses protein tyrosine phosphatase inactivation. Prx II also leads to the suppression of PDGFR activation in primary culture and a murine restenosis model, including PDGF-dependent neointimal thickening of vascular smooth muscle cells. These results demonstrate a localized role for endogenous H2O2 in PDGF signalling, and indicate a biological function of Prx II in cardiovascular disease.