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The aim of this article is to review the mechanism, technical characteristics, biological response and clinical applications of cutting balloon angioplasty in peripheral vessels. The cutting balloon is a non-compliant, balloon catheter equipped with three-to-four microtome-sharp atherotomes. When used appropriately, it is safe and easy to use, with a high immediate success rate and few complications, provided oversizing is avoided. There is some evidence that pre-dilation with a standard or high-pressure balloon may also predispose to vascular rupture. The cutting balloon has proved to be beneficial in treating difficult complex lesions in the coronary arteries. Early experience in non-coronary vessels shows that cutting balloon angioplasty can be used to treat peripheral bypass anastomotic and haemodialysis fistula stenoses that are resistant to conventional high-inflation pressures. Its application in de novo peripheral arterial lesions and non-coronary in-stent restenosis is still under discussion. Theoretically, this device induces a smaller degree of vessel wall injury localised to the area of incisions and sparing the interincisional segments; however, this postulated reduction in restenosis rates has not been confirmed in clinical practice.