The Serum Response Factor (SRF) coactivator myocardin stimulates the transcription of multiple muscle genes during cardiac and smooth muscle development. Mouse embryos lacking myocardin die during the earliest stages of smooth muscle development and fail to express multiple smooth muscle marker genes in the embryonic dorsal aorta and other vascular structures. In this study, we used mutant embryonic stem cell lines to further define the role of myocardin in smooth muscle differentiation and vascular development. Misexpression of myocardin in undifferentiated muscle stem cells resulted in efficient activation of smooth muscle genes, and weaker activation of genes involved in cardiac and skeletal muscle differentiation. Remarkably, myocardin^−/− embryonic stem cell lines differentiated into smooth muscle cells in vitro, although these cells expressed significantly decreased levels of smooth muscle contractile genes. Moreover, genetically labeled myocardin^−/− ES cells were able to contribute to smooth muscle lineages in vivo. These results indicate that while myocardin function is sufficient for activation of SRF-dependent muscle gene expression in multiple cell types, myocardin-independent mechanism(s) can suffice for expression in some smooth muscle lineages.