Objective— We and others have previously shown that RhoA-dependent stimulation of myocardin-related transcription factor nuclear localization promotes smooth muscle cell (SMC) marker gene expression. The goal of this study was to provide direct in vivo evidence that actin polymerization by the diaphanous-related formins contributes to the regulation of SMC differentiation and phenotype. Approach and Results— Conditional Cre-based genetic approaches were used to overexpress a well-characterized dominant-negative variant of mDia1 (DNmDia) in SMC. DNmDia expression in SM22-expressing cells resulted in embryonic and perinatal lethality in ≈20% of mice because of defects in myocardial development and SMC investment of peripheral vessels. Although most DNmDia ⁺ /SM22Cre ⁺ mice exhibited no overt phenotype, the re-expression of SMC differentiation marker gene expression that occurs after carotid artery ligation was delayed, and this effect was accompanied by a significant decrease in myocardin-related transcription factor-A nuclear localization. Interestingly, neointima growth was inhibited by expression of DNmDia in SMC and this was likely because of a defect in directional SMC migration and not to defects in SMC proliferation or survival. Finally, by using the tamoxifen-inducible SM MHC-CreER ^T2 line, we showed that SMC-specific induction of DNmDia in adult mice decreased SMC marker gene expression. Conclusions— Our demonstration that diaphanous-related formin signaling plays a role in heart and vascular development and the maintenance of SMC phenotype provides important new evidence that Rho/actin/myocardin-related transcription factor signaling plays a critical role in cardiovascular function.