Tropomyosin (TM) is a regulatory protein of actomyosin system. Muscle type-specific expression of TM isoforms is generated from different genes and by alternative splicing. beta-TM isoforms in chicken skeletal and smooth muscles are encoded by a single gene and transcribed from the same promoter. We previously reported a smooth muscle cell (SMC) phenotype-dependent change in beta-TM expression (Kashiwada, K., Nishida, W., Hayashi, K., Ozawa, K., Yamanaka, Y., Saga, H., Yamashita, T., Tohyama, M., Shimada, S., Sato, K., and Sobue, K. (1997) J. Biol. Chem. 272, 15396-15404), and identified beta-TM as an SMC-differentiation marker. Here, we characterized the transcriptional machinery of the beta-TM gene in SMCs. Promoter and gel mobility shift analyses revealed an obligatory role for serum response factor and its interaction with the CArG box sequence in the SMC-specific transcription of the beta-TM gene in differentiated SMCs. We further isolated a novel homologue of the Barx homeoprotein family, Barx1b, from chicken gizzard. Barx1b was exclusively localized to SMCs of the upper digestive organs and their attached arteries and to craniofacial structures. Serum response factor and Barx1b bound each other directly, coordinately transactivated the beta-TM gene in differentiated SMCs and heterologous cells, and formed a ternary complex with a CArG probe. Taken together, these results suggest that SRF and Barx1b are coordinately involved in the SMC-specific transcription of the beta-TM gene in the upper digestive organs and their attached arteries.