Abstract: Disclosed is a tuvular sheath which is adapted to fit coaxially over an inflatable balloon. The sheath functions to alter the expansion characteristics of the balloon. In one preferred embodiment, the sheath converts the inflation profile of a dilatation balloon from a compliant mode to a noncompliant mode. Advantageously, the balloon sheath may be used in stent placement procedures, to accurately size the stent within a body lumen, while providing protection against balloon rupture. In one embodiment, the balloon sheath comprises a two-layered tubular structure, with an outer elastic layer surrounding an inner inelastic layer. Also disclosed are methods of altering the expansion characteristics of a balloon using the balloon sheath.