1 Perivascular nerves of the sheep middle cerebral artery show immunoreactivity for both vasoactive intestinal polypeptide (VIP) and calcitonin gene-related peptide (CGRP). 2 Rings of endothelium-denuded sheep middle cerebral artery precontracted with 5-hydroxytryptamine were relaxed by CGRP (maximum relaxation = 87.8 + 8.1%, pD2 = 7.81 + 0.12, n = 12) and by VIP (maximum relaxation = 55.1 + 4.1%, pD2 = 7.65 ± 0.04, n = 18). Rings of endothelium-denuded cat middle cerebral artery precontracted with U46619 were also relaxed by vasoactive intestinal polypeptide (maximum relaxation = 53.1 + 6.1%, pD2 = 7.82 + 0.11, n = 6). 3 Haemolysate (1 pl ml-) inhibited VIP-induced relaxation in endothelium-denuded sheep and cat middle cerebral artery (n = 6) but had no effect on the CGRP-induced relaxation of the sheep middle cerebral artery (n = 6). 4 The relaxant response to VIP in endothelium-denuded sheep middle cerebral artery was inhibited by methylene blue (10pM) and augmented by either M&B 22948 (10pM) or superoxide dismutase (150 units ml-1). Indomethacin (1 uM) had no effect.5 The addition of L-NG-monomethyl arginine (100pM) inhibited both neurogenic and VIP-induced relaxation of endothelium-denuded sheep MCA by 56 + 6% and 60 + 6% (n = 5) respectively. The CGRP-induced relaxation was unaffected. 6 It is concluded that neurally mediated vasodilatation in the sheep middle cerebral artery is mediated largely by VIP through a direct action on smooth muscle through a cyclic-GMP-mediated mechanism that appears to involve synthesis of nitric oxide from L-arginine. Vasodilatation by CGRP, which is also contained in perivascular nerves, does not utilize this pathway.