One of the most innovative fields of modern medical research is the percutaneous transluminal treatment of vascular disease. During recent decades considerable advances have been made in intravascular interventions for the treatment of coronary and peripheral arterial disease. Despite these advances, the long-term outcome remains an area of concern in many applications. Restenosis is still a challenge in endovascular medicine and has thus been referred to as the Achilles’ heel of percutaneous intervention. Therefore, novel strategies have been developed to overcome this problem. These include drug-eluting stents and the more recently introduced non-stent-based local drug delivery systems (in particular the drug-coated balloon). Results from several pre-clinical and clinical studies indicate that short-term exposure of injured arteries to paclitaxel delivered from regular angioplasty balloons may be sufficient to reduce late lumen loss and restenosis rates during a critical period of time after the angioplasty of diseased coronary and peripheral arteries. Although the number of published trials and patients treated is still limited, data available seem to prove that restenosis inhibition by immediate drug release is feasible. This article reviews the history of the drug-coated balloon and then focuses on peripheral artery trials.