Restenosis or occlusion after vascular procedures is ascribed to intimal hyperplasia. Transforming growth factor (TGF)-β1 is involved in recruitment of mesenchymal stem cells (MSCs) following arterial injury and its release from latent TGF-binding protein by matrix metalloproteinase (MMP)-14-induced proteolysis contributes to neointima formation. However, the relationship between MMP-14 and TGF-β1 activation in restenosis is unknown. This study investigated the relationship using a rat model of balloon-induced injury. Rats were assigned to vehicle-, SB431542 (SB)-, or recombinant human (rh)TGF-β1-treated groups and examined at various time points after balloon-induced injury for expression of TGF-β1/Smad signalling pathway components, MMP-14 and MSCs markers including Nestin, CD29 and Sca1⁺CD29⁺CD11b/c⁻CD45⁻. Intimal hyperplasia was reduced in SB- and rhTGF-β1-treated rats. The expression of TGF-β1, TGF-β1RI and Smad2/3 was decreased, but the levels of phosphorylated Smad2/3 were higher in SB-treated rats than vehicle-treated after 7 days to 14 days. rhTGF-β1 administration decreased the expression of TGF-β1/Smad pathway proteins, except for TGF-β1RI. Nestin and CD29 expression and the number of Sca1⁺CD29⁺CD11b⁻CD45⁻ cells were reduced, whereas MMP-14 expression was increased after SB431542 and rhTGF-β1 administration. These results suggest that TGF-β1/Smad signalling and MMP-14 act to recruit MSCs which differentiate to vascular smooth muscle cells and mesenchymal-like cells that participate in arterial repair/remodelling.