Modulation of smooth muscle cell (SMC) phenotype plays a central role in neointima formation. We recently demonstrated that Am80, a synthetic retinoic acid receptor alpha-specific agonist, inhibits the activity of the transcription factor KLF5, which is essential for neointima formation after vascular injury. In the present study, we aimed to further analyze the mechanism by which Am80 inhibits KLF5 and the effects of inhibiting KLF5 on SMCs and vascular lesion formation, as well as to evaluate potential of Am80 for use in the prevention of in-stent neointima formation. We found that Am80 inhibited both the expression and transcriptional function of KLF5. Of particular interest was our finding that KLF5 forms a transcriptionally active complex with unliganded RAR/RXR heterodimer on the PDGF-A promoter; Am80 disrupts this complex, thereby inhibiting KLF5-dependent transcriptional activation. Knocking down KLF5 using small interfering RNA suppressed serum-induced downregulation of SMC differentiation marker gene expression in cultured SMCs, and haploinsufficiency of KLF5 in mice attenuated phenotypic modulation of SMCs after vascular injury, indicating that KLF5 plays a key role in the control of SMC phenotype. Am80 augmented expression of the SMC differentiation marker genes in culture and within the vessel walls, and oral administration of Am80 significantly inhibited in-stent neointima formation in a rabbit stent-placement model. Taken together, these results demonstrate that KLF5 plays an important role in the control of SMC phenotype after vascular injury and suggest the feasibility of using Am80, delivered systemically and/or with a drug eluting stent, to prevent in-stent neointima formation.