Purpose: To investigate the mechanisms responsible for the dilatation of rat retinal arterioles in response to arachidonic acid (AA). Methods: Changes in the diameter of isolated, pressurized rat retinal arterioles were measured in the presence of AA alone and following pre-incubation with pharmacological agents inhibiting Ca2+ sparks and oscillations and K+ channels. Subcellular Ca2+ signals were recorded in arteriolar myocytes using Fluo-4-based confocal imaging. The effects of AA on membrane currents of retinal arteriolar myocytes were studied using whole-cell perforated patch clamp recording. Results: AA dilated pressurised retinal arterioles under conditions of myogenic tone. Eicosatetraynoic acid (ETYA) exerted a similar effect, but unlike AA, its effects were rapidly reversible. AA-induced dilation was associated with an inhibition of subcellular Ca2+ signals. Interventions known to block Ca2+ sparks and oscillations in retinal arterioles caused dilatation and inhibited AA-induced vasodilator responses. AA accelerated the rate of inactivation of the A-type Kv current and the voltage dependence of inactivation was shifted to more negative membrane potentials. It also enhanced voltage-activated and spontaneous BK currents, but only at positive membrane potentials. Pharmacological inhibition of A-type Kv and BK currents failed to block AA-induced vasodilator responses. AA suppressed L-type Ca2+ currents. Conclusions: These results suggest that AA induces retinal arteriolar vasodilation by inhibiting subcellular Ca2+ signalling activity in retinal arteriolar myocytes, most likely through a mechanism involving the inhibition of L-type Ca2+ channel activity. AA actions on K+ currents are inconsistent with a model in which K+ channels contribute to the vasodilator effects of AA.