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Activation of peroxisome proliferator-activated receptor (PPAR)-γ suppresses proliferation of rat pulmonary artery smooth muscle cells (PASMCs), and therefore ameliorates the development of pulmonary hypertension in animal models. However, the molecular mechanisms underlying this effect remain largely unknown. This study addressed this issue. The PPARγ agonist rosiglitazone dose-dependently stimulated heme oxygenase (HO)-1 expression in PASMCs, 5 μM rosiglitazone inducing a 12.1-fold increase in the HO-1 protein level. Cells pre-exposed to rosiglitazone showed a dose-dependent reduction in proliferation in response to serotonin; this was abolished by pretransfection of cells with sequence-specific small interfering RNA against HO-1. In addition, rosiglitazone stimulated p21WAF1 expression in PASMCs, a 2.34-fold increase in the p21WAF1 protein level being achieved with 5 μM rosiglitazone; again, this effect was blocked by knockdown of HO-1. Like loss of HO-1, loss of p21WAF1 through siRNA transfection also reversed the inhibitory effect of rosiglitazone on PASMC proliferation triggered by serotonin. Taken together, our findings suggest that activation of PPARγ induces HO-1 expression, and that this in turn stimulates p21WAF1 expression to suppress PASMC proliferation. Our study also indicates that rosiglitazone, a medicine widely used in the treatment of type 2 diabetes mellitus, has potential benefits for patients with pulmonary hypertension.