The interactions between serum response factor (SRF) and CArG elements are critical for smooth muscle cell (SMC) marker gene transcription. However, the mechanisms whereby SRF, which is expressed ubiquitously, contributes to SMC-specific transcription are unknown. Myocardin was recently cloned as a coactivator of SRF in the heart, but its role in regulating CArG-dependent expression of SMC differentiation marker genes has not been clearly elucidated. In this study, we examined the expression and the function of myocardin in SMCs. In adult mice, myocardin mRNA was expressed in multiple smooth muscle (SM) tissues including the aorta, bladder, stomach, intestine, and colon, as well as the heart. Myocardin was also expressed in cultured rat aortic SMCs and A404 SMC precursor cells. Of particular interest, expression of myocardin was induced during differentiation of A404 cells, although it was not expressed in parental P19 cells from which A404 cells were derived. Cotransfection studies in SMCs revealed that myocardin induced the activity of multiple SMC marker gene promoters including SM alpha-actin, SM-myosin heavy chain, and SM22alpha by 9- to 60-fold in a CArG-dependent manner, whereas myocardin short interfering RNA markedly decreased activity of these promoters. Moreover, adenovirus-mediated overexpression of a dominant-negative form of myocardin significantly suppressed expression of endogenous SMC marker genes, whereas adenovirus-mediated overexpression of wild-type myocardin increased expression. Taken together, results provide compelling evidence that myocardin plays a key role as a transcriptional coactivator of SMC marker genes through CArG-dependent mechanisms.