Nitric oxide (NO) plays an important role in vascular regulation through its vasodilatory, antiatherogenic, and antithrombotic properties. NO inhibits platelet adhesion and aggregation and modulates smooth muscle cell (SMC) proliferation and migration. In animals with experimentally induced vascular injury, ec-NOS gene transfection not only restored NO production to normal levels but also increased vascular reactivity of the injured vessels. However, it is unclear whether NO regulates smooth-muscle-specific gene expression. We report here that addition of PDGF-BB to vascular smooth muscle cells suppressed SM-MHC expression but treatment with the NO donors FK409 and SNAP restored SM-MHC mRNA/protein expression. In vitro transfection and subsequent CAT assays demonstrated that exogenous NO can restore PDGF-BB-induced suppression of SM-MHC promoter activity. Promoter deletion analysis revealed that a CArG-3 box located at -1276 bp in the SM-MHC promoter was important for NO-dependent promoter regulation and as well as high level promoter activity. Gel mobility shift assays showed that CArG-3 contained the SRF binding site and a binding site for YY1, a nuclear factor which acts as a negative regulator on muscle-specific promoters. Interestingly, NO donor FK409 reduced YY1 binding to the CArG-3 element but increased SRF binding, suggesting that these two factors bind competitively to the overlapping sites. We also found that mutation to the YY1 binding site in the CArG-3 element resulted in a loss of PDGF-BB-induced suppression of the SM-MHC promoter activity. These findings indicate that NO regulates SM-MHC gene expression at the transcriptional level at least partially through the regulation of transcription factor binding activities on the CArG element. Thus we propose that NO plays a positive role in maintaining the differentiated state of VSMCs.