Ischemic/hypoxic injury significantly damages vascular function, detrimentally impacting patient outcomes. Changes in mitochondrial structure and function are closely associated with ischemia/hypoxia-induced vascular dysfunction. The mechanism of this process remains elusive. Using rat models of ischemia and hypoxic vascular smooth muscle cells (VSMCs), we combined transmission electron microscopy, super-resolution microscopy, and metabolic analysis to analyze the structure and function change of mitochondrial cristae. Multi-omics approaches revealed arginase 1 (Arg1) upregulation in ischemic VSMCs, confirmed by in vivo and in vitro knockout models showing Arg1's protective effects on mitochondrial cristae, mitochondrial and vascular function, and limited the release of mtDNA. Mechanistically, Arg1 interacting with Mic10 led to mitochondrial cristae remodeling, together with hypoxia-induced VDAC1 lactylation resulting in the opening of MPTP and release of mtDNA of VSMCs. The released mtDNA led to PANoptosis of VSMCs via activation of the cGAS-STING pathway. ChIP-qPCR results demonstrated that lactate-mediated Arg1 up-regulation was due to H3K18la upregulation. VSMCs targeted nano-material PLGA-PEI-siRNA@PM-α-SMA (NP-siArg1) significantly improved vascular dysfunction. This study uncovers a new mechanism of vascular dysfunction following ischemic/hypoxic injury: a damaging positive feedback loop mediated by lactate-regulated Arg1 expression between the nucleus and mitochondria, leading to mitochondria cristae disorder and mtDNA release, culminating in VSMCs PANoptosis. Targeting VSMCs Arg1 inhibition offers a potential therapeutic strategy to alleviate ischemia/hypoxia-induced vascular impairments.