An intravascular radiation delivery system including a catheter, a radiation source disposed in an open-ended lumen in the catheter and a closed-ended sheath surrounding the radiation source so as to prevent blood and other fluids from coming into contact with the radiation source. Preferably, the open-ended lumen is centered in the balloon for uniform radiation delivery. The catheter may include a blood perfusion lumen under the balloon or around the balloon. The open-ended lumen in the catheter may have a reduced diameter adjacent the distal end of the catheter to prevent the radiation source from exiting the lumen. Methods of using the radiation delivery system are also disclosed. An alternative method of delivering radiation to a treatment site inside the vasculature of a patient using a gas-filled balloon catheter and a radiation source disposed in the balloon catheter. The treatment site is exposed to radiation, preferably beta radiation, through the gas-filled balloon.