A modified concept using a movable fiber with radial light dispersion was developed for combining mechanical balloon dilatation and intraluminal circumferential Nd‐Yag laser irradiation of the arterial wall. The aims of the study were the technical feasibility and the acute and chronic vascular tissue effects of laser‐assisted balloon dilatation. The carotid arteries (n = 9 dogs) and femoral arteries (n = 5 dogs) of dogs were mechanically dilated and simultaneously circumferentially irradiated through the balloon by 1,064 nm Nd‐Yag laser (20‐25 W). Temperature at the adventitial surface was kept constant at 50°C, 60°C, 70°C, or 80°C for either 8 or 15 seconds by a computerized feedback system for temperature control. Angiographic and histological results were available acutely, subacutely (2 days), and at 3 months. Angio‐graphically, stable and smooth enlargement of the lumen was demonstrated acutely. At 3 months, occlusions, probably throm‐botic in origin, had occurred in 5 of the carotid arteries and none of the femoral arteries. Histologically, laser‐induced coagulation of the arterial wall with loss of cellular elements was demonstrated. Collagen and elastic fibers remained relatively intact. In two carotid arteries intimal proliferation was observed at the treated site. Thus, this technique appears to be technically feasible, yet further study is needed to assess its potential to reduce or repair acute vascular complications (dissections) and to reduce restenoses after percutaneous transluminal coronary angioplasty (PTCA). However, the clinical value of this technique appears to be limited in view of the thromboses and reactive proliferations observed in this preliminary study. Copyright © 1990 Wiley‐Liss, Inc., A Wiley Company