Percutaneous transluminal angioplasty is an established form of therapy for femoropopliteal artery disease. Currently, percutaneous transluminal angioplasty (PTA) is carried out using standard balloon with or without deployment of a stent but is associated with a high rate of restenosis and stent-related complications. Treatment options for restenosis, especially in-stent restenosis, are limited. Drug-coated balloons promise to reduce the rates of restenosis by effective delivery of antiproliferative agent (paclitaxel) directly to vessel wall without the need for a permanent implant. In this review, we look at the technology and rationale behind drug-coated balloons and examine the evidence available so far. Recently, several studies tested the effectiveness of paclitaxel-coated balloon angioplasty compared to that of standard PTA in both de novo lesions and in-stent restenosis of femoropopliteal artery. Paclitaxel-coated balloon use resulted in reduced rates of restenosis and favourable clinical outcomes in both these lesion groups. However, in complex lesions, there is still lack of data to support the use of these balloons. Paclitaxel-coated balloon is a safe and effective therapeutic option in patients with both de novo lesions and in-stent restenosis involving femoropopliteal artery. In light of the new evidence, it is time to consider incorporation of this effective therapeutic option into clinical practice. However, further research is needed for the use of paclitaxel-coated balloons in complex femoropopliteal lesions like calcified lesions especially as adjuncts to cutting balloons and debulking strategies.