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Atherosclerotic plaques consist mostly of smooth muscle cells (SMC), and genes that influence SMC biology can modulate coronary artery disease (CAD) risk. Allelic variation at 15q22.33 has been identified by genome-wide association studies to modify the risk of CAD, and is associated with expression of SMAD3 in SMC, but the mechanism by which this gene modifies CAD risk remains poorly understood. SMC-specific deletion of Smad3 in a murine atherosclerosis model resulted in greater plaque burden, more positive remodeling, and increased vascular calcification. Single-cell transcriptomic analyses revealed that loss of Smad3 altered SMC transition cell state toward two fates: a novel SMC phenotype that governs both vascular remodeling and recruitment of inflammatory cells, as well as a chondromyocyte fate. The remodeling population was marked by uniquely high Mmp3 and Cxcl12 expression, and its appearance correlated with higher risk plaque features such as increased positive remodeling and macrophage content. Further, investigation of transcriptional mechanisms by which Smad3 alters SMC cell fate revealed novel roles for Hox and Sox transcription factors whose direct interaction with Smad3 regulate an extensive transcriptional program balancing remodeling and vascular extracellular matrix with significant implications for atherosclerotic and Mendelian aortic aneurysmal diseases. Together, these data suggest that Smad3 expression in SMC inhibits the emergence of specific SMC phenotypic transition cells that mediate adverse plaque features, including positive remodeling, monocyte recruitment, and vascular calcification.