The TMEM16A chloride channel represents a fundamental depolarising mechanism in arterial smooth muscle cells (SMCs) and cerebral contractile pericytes. The channel is a proposed target for diseases of impaired vascular tone including stroke, vascular dementia and hypertension; however, the mechanisms of modulation of the channel by synthetic inhibitors and activators are incompletely understood. Here, we provide a functional characterization of a recently disclosed positive allosteric modulator (PAM) of the TMEM16A channel. In the presence of sub-maximal (300 nM) intracellular free Ca2+ concentration [Ca2+]i, PAM activated the heterologously expressed TMEM16A channels at positive and negative potentials (EC50≈4 nM), while being almost ineffective on the closely related TMEM16B channel. PAM did not activate the TMEM16A currents in either the absence of intracellular Ca2+ or in the presence of saturating [Ca2+]i (12 μM). Mutant TMEM16A channels with the intracellular gate constitutively open were much less sensitive to PAM, suggesting that PAM may act as a modifier of TMEM16A channel gating. Consistent with the effects observed in heterologously expressed TMEM16A channels, PAM activated endogenous TMEM16A currents in isolated rat aortic SMCs, promoted contraction of isolated aortic rings and enhanced capillary (pericyte) constriction evoked by endothelin-1 or oxygen-glucose deprivation (OGD) to stimulate cerebral ischemia. Conversely, inhibiting TMEM16A pharmacologically facilitated arterial and pericyte relaxation, and protected against OGD-mediated pericyte cell death. In summary, this work (i) enhances our understanding of fundamental mechanisms of biophysical modulation of the TMEM16A channel and (ii) supports the view that TMEM16A is a key determinant of SMCs and pericytes tone.