The GATA-4/5/6 family of transcription factors is important for the development of the cardiovascular system and the visceral endoderm. GATA-6 is the only family member expressed in vascular smooth muscle cells and has been shown to be important for controlling the phenotype of these cells following vascular injury. To clarify further the role of GATA-6 in regulating vascular smooth muscle differentiation, we directly examined its ability to regulate the promoters of smooth muscle-specific genes. This analysis revealed that GATA-6 strongly repressed telokin promoter activity. In contrast, GATA-6 activated the smooth muscle myosin heavy chain and smooth muscle alpha-actin promoters and had no significant effect on the SM22alpha promoter. Gel mobility shift assays demonstrate that GATA-6 binds to a consensus site adjacent to the CArG box in the telokin promoter. GATA-6 did not interfere with the serum-response factor-stimulated promoter activity but blocked myocardin-induced activation of the telokin promoter. In contrast, GATA-6 and myocardin resulted in synergistic activation of the smooth muscle myosin heavy chain promoter. Consistent with these findings, overexpression of GATA-6 in smooth muscle cells selectively inhibited expression of endogenous telokin, while simultaneously increasing expression of other smooth muscle proteins. These data suggest that GATA-6 selectively inhibits telokin expression by triggering the displacement of myocardin from the serum-response factor. As GATA-6 is expressed at high levels in vascular smooth muscle, this finding may explain the relatively low levels of telokin expression in the vascular system. These data also reveal a novel transcription regulatory mechanism by which GATA-6 can modulate the activity of the myocardin-serum-response factor complexes.