Vascular endothelium plays an important role in maintaining vascular homeostasis by synthesizing and releasing several vasodilating factors, such as prostacyclin, nitric oxide (NO), and a yet unidentified endothelium-derived hyperpolarizing factor (EDHF). Possible candidates for EDHF include epoxyeicosatrienoic acids, endothelium-derived K⁺ ions, and as we have recently identified, hydrogen peroxide (H₂O₂). Electrical communication between endothelial and smooth muscle cells through gap junctions has also been suggested to be involved in endothelium-dependent hyperpolarization. Among the above candidates, the H₂O₂ hypothesis well explains the pathophysiological interactions between NO and EDHF and re-highlights the physiological roles of the reactive oxygen species in endothelium-dependent vascular responses. This brief review summarizes our current knowledge about H₂O₂ as an EDHF, with special reference to its production by the endothelium, its action on membrane potentials and its pathophysiological roles.