While matrix remodeling plays a key role in vascular physiology and pathology, the underlying mechanisms have remained incompletely understood. We studied the remodeling of collagen matrices by individual vascular smooth muscle cells (SMCs), clusters and monolayers. In addition, we focused on the contribution of transglutaminase 2 (TG2), which plays an important role in the remodeling of small arteries. Single SMCs displaced fibers in collagen matrices at distances up to at least 300 μm in the course of 8–12 h. This process involved both ‘hauling up’ of matrix by the cells and local matrix compaction at a distance from the cells, up to 200 μm. This exceeded the distance over which cellular protrusions were active, implicating the involvement of secreted enzymes such as TG2. SMC isolated from TG2 KO mice still showed compaction, with changed dynamics and relaxation. The TG active site inhibitor L682777 blocked local compaction by wild type cells, strongly reducing the displacement of matrix towards the cells. At increasing cell density, cells cooperated to establish compaction. In a ring-shaped collagen matrix, this resulted in preferential displacement in the radial direction, perpendicular to the cellular long axis. This process was unaffected by inhibition of TG2 cross-linking. These results show that SMCs are capable of matrix remodeling by prolonged, gradual compaction along their short axis. This process could add to the 3D organization and remodeling of blood vessels based on the orientation and contraction of SMCs.