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Studies have demonstrated that nuclear factor of activated T cells 5 (NFAT5) is not only a tonicity‐responsive transcription factor but also activated by other stimuli, so we aim to investigate whether NFAT5 participates in collateral arteries formation in rats. We performed femoral artery ligature (FAL) in rats for hindlimb ischaemia model and found that NFAT5 was up‐regulated in rat adductors with FAL compared with sham group. Knockdown of NFAT5 with locally injection of adenovirus‐mediated NFAT5‐shRNA in rats significantly inhibited hindlimb blood perfusion recovery and arteriogenesis. Moreover, NFAT5 knockdown decreased macrophages infiltration and monocyte chemotactic protein‐1 (MCP‐1) expression in rats adductors. In vitro, with interleukin‐1β (IL‐1β) stimulation and loss‐of‐function studies, we demonstrated that NFAT5 knockdown inhibits MCP‐1 expression in endothelial cells and chemotaxis of THP‐1 cells regulated by ERK1/2 pathway. More importantly, exogenous MCP‐1 delivery could recover hindlimb blood perfusion, promote arteriogenesis and macrophages infiltration in rats after FAL, which were depressed by NFAT5 knockdown. Besides, NFAT5 knockdown also inhibited angiogenesis in gastrocnemius muscles in rats. Our results indicate that NFAT5 is a critical regulator of arteriogenesis and angiogenesis via MCP‐1‐dependent monocyte recruitment, suggesting that NFAT5 may represent an alternative therapeutic target for ischaemic diseases. [ABSTRACT FROM AUTHOR]