Background: Cardiovascular disorders associated with endothelial dysfunction, such as atherosclerosis, have decreased nitric oxide (NO) bioavailability. Arginase in the vasculature can compete with eNOS for L-arginine and has been implicated in atherosclerosis. The aim of this study was to evaluate the effect of endothelial-specific elevation of arginase II expression on endothelial function and the development of atherosclerosis. Methodology/Principal Findings: Transgenic mice on a C57BL/6 background with endothelial-specific overexpression of human arginase II (hArgII) gene under the control of the Tie2 promoter were produced. The hArgII mice had elevated tissue arginase activity except in liver and in resident peritoneal macrophages, confirming endothelial specificity of the transgene. Using small-vessel myography, aorta from these mice exhibited endothelial dysfunction when compared to their non-transgenic littermate controls. The blood pressure of the hArgII mice was 17% higher than their littermate controls and, when crossed with apoE -/- mice, hArgII mice had increased aortic atherosclerotic lesions. Conclusion: We conclude that overexpression of arginase II in the endothelium is detrimental to the cardiovascular system.