The diverse functions mediated by smooth muscle cells (SMCs) in organ systems throughout the body are ultimately dependent upon the expression of a unique set of SMC-restricted contractile and cytoskeletal proteins that distinguish this cell lineage from cardiac and skeletal myocytes. A distinguishing feature of the SMC lineage is the capacity of SMCs to reversibly modulate their phenotype and proliferate in response to a variety of stimuli during postnatal development (for a review, see reference 35). In the vasculature, SMCs in the tunica medium of arteries and veins are cell cycle arrested and express a set of lineage-restricted genes, including those for smooth muscle (SM) myosin heavy chain, SM α-actin, SM22α, and calponin, which together define the unique contractile properties of this muscle cell lineage. However, in response to arterial injury, SMCs downregulate expression of contractile genes and concomitantly upregulate a set of genes required for synthetic, migratory, and proliferative functions. This phenotypic modulation has been implicated in the pathogenesis of diseases, including atherosclerosis, restenosis following coronary angioplasty and/or stent implantation, pulmonary hypertension, and asthma (14, 33, 39, 41). Because it is expressed exclusively and abundantly in SMCs during postnatal development (23, 42), our group and others have utilized the SMC-restricted SM22α promoter as a model system to elucidate the molecular mechanisms that regulate SMC differentiation and modulation of the SMC phenotype (4, 19, 24, 28, 34, 42, 44). The 441-bp mouse SM22α promoter functions in an SMC-specific fashion and restricts gene expression to arterial SMCs in transgenic mice (19, 24, 28). The SM22α promoter contains six nuclear protein binding sites, designated SME 1 to 6, two of which contain consensus CArG motifs (SME-1 and SME-4) that bind the MADS box transcription factor serum response factor (SRF) (19). Mutations that abolish binding of SRF to the SM22α promoter totally abolish promoter activity in transgenic mice (19). Moreover, a multimerized copy of the proximal SM22α CArG motif and 21 nucleotides of 5′-flanking sequence (bp −171 to −136) is necessary and sufficient to restrict gene expression to arterial SMCs in F0 transgenic mouse embryos (44). Consistent with these data, functionally important CArG boxes have been identified in multiple other SMC-restricted genes, including the SM myosin heavy chain (MyHC) promoter and intragenic enhancer, the SM α-actin promoter and intragenic enhancer, the telokin promoter, and the γ-enteric actin promoter (12, 25, 26, 38). Moreover, SRF plays an important role in regulating SMC differentiation and specification from undifferentiated mesenchyme (22). However, it remains unclear how SRF, a transcription factor that is expressed ubiquitously and which activates expression of growth-responsive genes, including c-fos and egr-1, can differentially activate genes expressed in an SMC lineage-restricted pattern. In this regard, it is noteworthy that SRF may be activated by posttranslational modifications and that alternative SRF isoforms have been identified, some of which function in a dominant-negative fashion (3, 17). SRF binds to the CArG box as a homodimer, via its MADS domain, and recruits transcriptional cofactors in order to integrate combinatorial signaling and modulate target gene expression (for a review, see reference 45). In skeletal muscle, SRF physically associates with MyoD and synergistically activates skeletal muscle-specific transcriptional regulatory elements (40). Similarly, in cardiac myocytes, SRF physically associates with the cardiac lineage-restricted transcription factors Nkx-2.5 and GATA4 and synergistically activates cardiac-specific transcriptional regulatory elements (5). Consistent with this paradigm, UV-crosslinking analyses of nuclear proteins that bind to the SME-4 CArG box in the SM22α promoter with SRF revealed an 80- to 90-kDa band that was expressed in an SMC lineage-restricted fashion (44). These data suggested that one, or more, SMC lineage-restricted SRF cofactors may function in concert with SRF and activate transcription of SMC lineage-restricted genes. Therefore, it was noteworthy when Olson and colleagues performed a search in silico and identified a novel cardiac-restricted transcription factor, designated myocardin, which binds to and functionally synergizes with SRF in the heart (48). Myocardin shows high-level sequence identity with members of the SAP (SAF-A/B, Acinus, PIAS) family of nuclear proteins, including the recently identified proteins MRTF-A/MAL/MKL1 and MRTF-B (1, 49). Each member of this family contains a conserved SAP domain that binds to A/T-rich genomic sequences or scaffold attachment regions (SARs). Related SAP family members have been shown to play a role in high-order transcriptional regulation, chromatin remodeling, and apoptosis-mediated condensation and fragmentation of chromosomal DNA (1, 10, 20). Olson and colleagues reported that myocardin is an early marker of the cardiac muscle cell lineage, where it continues to be expressed throughout development (48). In addition, they reported that myocardin is expressed transiently in some SMCs during embryonic development. Interestingly, myocardin transactivates multiple cardiac-restricted promoters but notably only those containing consensus CArG boxes or SRF binding sites (48). Consistent with this finding, the N-terminal domain of myocardin binds directly to the MADS box of SRF (48). In Xenopus laevis, forced expression of a dominant negative myocardin mutant protein resulted in a dramatic reduction in genes encoding cardiac myocyte-restricted contractile protein isoforms and the cardiac-restricted homeobox transcription factor Nkx-2.5 (48). Given these data and the previously defined role of SRF in the SMC lineage, it was of interest to determine what role, if any, myocardin plays in regulating differentiation of the SMC lineage. In the studies described in this report, we demonstrated that the myocardin gene is expressed in visceral and vascular SMCs at levels equivalent to or exceeding those observed in the heart, the myocardin gene is developmentally regulated in visceral and vascular SMCs during embryonic development, myocardin transactivates multiple SMC-specific transcriptional regulatory elements in an SRF-dependent fashion, SM22α promoter activity in SMCs is myocardin dependent, and, remarkably, forced expression of myocardin in undifferentiated embryonic stem (ES) cells activates transcription and expression of the endogenous SM22α gene as well as expression of the endogenous SM-α-actin and calponin-h1 genes. Taken together, these data demonstrate that myocardin plays a previously unrecognized and important role in the transcriptional program regulating SMC development and differentiation.