The clinical literature cites cases where slow, incomplete, or nonuniform protein resorption from protein impregnated arterial prostheses produces undesirable localized internal capsule proliferation leading to a significant reduction of the internal diameter of the prosthesis. In an attempt to describe the hemodynamic response to this phenomenon, the blood flow in such stenotic regions was simulated and characterized numerically using FIDAP computational fluid dynamics software to determine the Navier-Stokes and continuity equations for simple channel flow. To simulate various stages of internal capsule development, numeric computations were made in an idealized tubular expansion at stenosis ratios ranging from 0.9 to 0.5 and stenosis length ratios from 10 to 40. The results indicated that a triangular annular ring vortex was formed immediately distal to the stenosis at all Reynolds numbers (Re) studied. The size of the vortex increased almost linearly with the Reynolds number. The pressure drop through the stenosis was affected by blood flow rate, severity, and stenosis length. When the stenosis ratio was low, the pressure drop through the stenosis increased gradually and almost linearly with blood flow rate. In a severe stenosis, the pressure drop was no longer a linear function of flow rate, but increased significantly with increasing flow rate. In conclusion, satisfactory healing of the internal capsule requires fast resorption of any impregnated protein. If the resorption is slow, incomplete, or nonuniform, there is a tendency for the lumen to narrow, causing stenosis, an increased pressure drop through the narrowed graft and disturbed flow distal to the stenosis. This phenomenon therefore constitutes a major limitation for using this type of graft in small diameter arterial reconstruction.