It is well established that arteries are subjected to residual stress. Due to the effect of residual stress, the arteries open to a horse-shoe shape when a longitudinal cut is made on an excised arterial segment. Previously, the residual stress has been quantified by the opening angle of the horse-shoe shape. We have employed a finite element analysis of the open arterial segment to restore the same to the original cylindrical shape and computed the circumferential strain as well as the stress distribution in the wall. In this study, the stress distribution in the femoral arteries of miniswine was computed with and without the residual stress for a range of transmural pressures. Our analysis showed that the residual stress has the effect of redistribution of the circumferential stresses between the intima and the adventitia under physiological loading. The redistribution of the stress with the inclusion of residual stress may be important in the studies on effect of wall stresses on the endothelial and vascular smooth muscle cells.