Formation of the vascular system requires differentiation and patterning of endothelial and smooth muscle cells (SMCs). Although much attention has focused on development of the vascular endothelial network, the mechanisms that control vascular SMC development are largely unknown. Myocardin is a smooth and cardiac muscle-specific transcriptional coactivator of serum response factor, a ubiquitous transcription factor implicated in smooth muscle gene expression. When expressed ectopically in nonmuscle cells, myocardin can induce smooth muscle differentiation by its association with serum response factor. Here we report that mouse embryos homozygous for a myocardin loss-of-function mutation die by embryonic day 10.5 and show no evidence of vascular SMC differentiation. Myocardin is the only transcription factor known to be necessary and sufficient for vascular SMC differentiation.