Endothelium-dependent hyperpolarization assumes increasing functional significance as artery size decreases. As such, it makes a significant contribution to the physiological regulation of blood pressure and flow, independently of nitric oxide. Hyperpolarization is initiated in the endothelium by an increase in cytoplasmic calcium concentration, which activates small and intermediate conductance calcium-activated K⁺ channels (SKCa and IKCa channels). This key event is followed by a transfer of the hyperpolarization to the smooth muscle, consequently closing voltage-dependent calcium channels and leading to smooth muscle relaxation and vasodilatation. How the transfer of hyperpolarization occurs has been the subject of considerable debate, with a number of putative hyperpolarizing factors, or EDHFs, proposed to be responsible alongside the possibility that spread of hyperpolarization occurs passively. Passive spread of hyperpolarization could occur through myoendothelial gap junctions which link the endothelial and smooth muscle cells. This lecture will provide an overview of the current state of knowledge in this area, discussing recent evidence suggesting that endothelial KCa channels are rationally localized within discrete regions of the endothelial cell, with consequences for the functional mechanisms responsible for EDHF dilatation. The possibility that EDHF-mediated dilatation reflects the combined action of a diffusible factor and spread of hyperpolarization through myendothelial gap junctions will also be discussed in relation to radial spread into the artery wall, and longitudinal spread over distance along the artery wall, important for coordinating flow through vascular beds.