NADPH oxidases of the Nox family are heme-proteins that catalyze the formation of reactive oxygen species (ROS) from NADPH and moleculare oxygen. So far 7 isoforms have been identified in this family, which differ in their tissue specific expression, their mode of activation and the type of ROS generated. Among all Nox proteins, Nox4 is the only one which is constitutively active and therefore ROS production by Nox4 is controlled on the expression but not activity level. We set-out to uncover the molecular basis of this difference and to identify specific functions of Nox4. Overexpression studies revealed that a specific feature of the N-terminal part of Nox4 mediates its constitutive activity whereas an extended E-loop of the transmembrane region traps superoxide and facilitates H₂O₂ formation by Nox4. Other vascular Nox proteins lack the extended E-loop and therefore predominately form O₂^-. As H₂O₂, different to O₂^-, does not scavenge NO, induction of Nox4 should not result in endothelial dysfunction. We generated systemic and inducible Nox4 knockout mice to address this aspect. Importantly, loss of Nox4 was rather deleterious for the vascular homeostasis than protective. Nox4 deficient mice failed to increase VEGF expression in response to local hypoxia via a dysfunction of the HIF system and Nox4 KO mice presented with a hyperinflammatory phenotype which was compatible with reduced eNOS activation. The latter could arise from a basal lack of H₂O₂-mediated eNOS activation. These observations qualify Nox4 as a protective NADPH oxidase. Apparently, the basal ROS production by the enzyme has an important function in balancing pro- and antioxidative systems in the vascular wall.