—Little is known regarding transcriptional regulatory mechanisms that control the sequential and coordinate expression of genes during smooth muscle cell (SMC) differentiation. To facilitate mechanistic studies of SMC differentiation, we established a novel P19-derived clonal cell line (designated A404) harboring a smooth muscle (SM) α-actin promoter/intron-driven puromycin resistance gene. Retinoic acid plus puromycin treatment stimulated rapid differentiation of multipotential A404 cells into SMCs that expressed multiple SMC differentiation marker genes, including the definitive SM-lineage marker SM myosin heavy chain. Using this system, we demonstrated that various transcription factors were upregulated coincidentally with the expression of SMC differentiation marker genes. Of interest, the expression of serum response factor (SRF), whose function is critical for SMC-specific transcription, was high in undifferentiated A404 cells, and it did not increase over the course of differentiation. However, chromatin immunoprecipitation analyses showed that SRF did not bind the target sites of endogenous SMC marker genes in chromatin in undifferentiated cells, but it did in differentiated A404 cells, and it was associated with hyperacetylation of histones H3 and H4. The present studies define a novel cell system for studies of transcriptional regulation during the early stages of SMC differentiation, and using this system, we obtained evidence for the involvement of chromatin remodeling and selective recruitment of SRF to CArG elements in the induction of cell-selective marker genes during SMC differentiation.