Restenosis following interventions in the coronary or peripheral arteries develops over weeks to months. In coronary arteries the restenosis rate has been markedly reduced since the advent of drug-eluting stents. Non-stent-based methods for local drug delivery enable restenosis inhibition without the need for stent implantation, does not permanently change the structure of the vessel, are repeatable, and seems to be applicable where drug-eluting stents provide insufficient protection. Preclinical data indicate that short exposure of the vessel wall to a lipophilic inhibitor of cell proliferation is sufficient for preventing restenosis. Initial evidence to this effect emerged from an investigation of paclitaxel embedded in a matrix that enhances the solubility and release of the agent from the balloon coating as well as its transfer to the vessel wall. Further corroborating data from preclinical and clinical studies demonstrating a reduction in late lumen loss and lower restenosis rates led to the market introduction of a variety of paclitaxel-coated angioplasty balloons. The effectiveness of restenosis inhibition is not determined by the active agent alone. Other factors that are crucial for the effectiveness and safety of drug-coated angioplasty balloons are the formulation containing the agent and the coating technique. In this review we first outline the development of paclitaxel-coated balloons to then provide an overview of the preclinical results obtained with different paclitaxel-coated balloons and finally compare these with the outcome in patients. The article concludes with a short outlook on initial results with a zotarolimus-coated angioplasty balloon.