Neural activity increases local blood flow in the CNS, and this increase is the basis of both BOLD and PET functional imaging techniques. It is usually assumed that blood flow is controlled by smooth muscle surrounding pre-capillary arterioles, which is innervated by noradrenaline-releasing neurons. However, 65% of vascular noradrenergic innervation in the brain is of capillaries rather than arterioles (Cohen et al. 1997), suggesting that blood flow may also be regulated at the capillary level. Capillaries lack smooth muscle but in places are surrounded by contractile cells called pericytes, which express both muscle and non-muscle actin and myosin. In culture or on isolated blood vessels, pericytes have been shown to contract and dilate in response to various neurotransmitters, resulting in a local change in capillary diameter. Here we show a role for pericytes in controlling capillary diameter in situ in whole retina and in cerebellar slices. Pericytes were labelled by an antibody directed at the membrane chondroitin sulfate proteoglycan NG2, and were found to be separated by a distance of 34.2±3.6 μm (mean±s.e.m., n=24) along retinal capillaries. Electrical stimulation of retinal pericytes evoked a localised constriction of capillaries, which propagated along the capillary at about 2 μm/s to evoke constriction of distant pericytes. Superfused ATP or UTP also caused localised constriction of capillaries at points close to pericytes, suggesting a possible role for purinergic P2 receptors in the control of capillary diameter. Pericyte constriction led to a reduction in capillary diameter by up to 77%, implying a flow reduction of 99% by Poiseuille’s law for laminar flow, and a larger reduction for flow involving red blood cell movement through narrow capillaries. In the first few minutes of simulated ischaemia, retinal pericytes constricted capillaries at localised points. In cerebellar slices, noradrenaline constricted pericytes on capillaries in the molecular layer. This constriction could be reversed by applying glutamate to mimic glutamate release by neuronal activity. Electrical stimulation near the retinal inner plexiform layer evoked a pericyte constriction which was blocked by TTX. Puffing GABA receptor blockers also evoked a constriction. Thus, neuronal activity can regulate retinal capillary diameter via pericytes. These data identify pericytes as possible contributors to the vascular response to changes in neural activity. Pericytes potentially have a role in CNS vascular disease and therapy.