The qkI gene encodes an RNA binding protein which was identified as a candidate for the classical neurologic mutation, qkv. Although qkI is involved in glial cell differentiation in mice, qkI homologues in other species play important roles in various developmental processes. Here, we show a novel function of qkI in smooth muscle cell differentiation during embryonic blood vessel formation. qkI null embryos died between embryonic day 9.5 and 10.5. Embryonic day 9.5 qkI null embryos showed a lack of large vitelline vessels in the yolk sacs, kinky neural tubes, pericardial effusion, open neural tubes and incomplete embryonic turning. Using X-gal and immunohistochemical staining, qkI is first shown to be expressed in endothelial cells and smooth muscle cells. Analyses of qkI null embryos in vivo and in vitro revealed that the vitelline artery was too thin to connect properly to the yolk sac, thereby preventing remodeling of the yolk sac vasculature, and that the vitelline vessel was deficient in smooth muscle cells. Addition of QKI and platelet-endothelial cell adhesion molecule-1 positive cells to an in vitro para-aortic splanchnopleural culture of qkI null embryos rescued the vascular remodeling deficit. These data suggest that QKI protein has a critical regulatory role in smooth muscle cell development, and that smooth muscle cells play an important role in inducing vascular remodeling.