One of the major limitations in tissue engineering is cell sourcing. Multipotent progenitor cells appear to have many promising features for that purpose. Mechanical stimulation is known to play an important role in determining cell phenotype. The aim of this work was to investigate the effects of cyclic stretch on rat bone marrow derived progenitor cell (BMPC) morphology and smooth muscle-directed differentiation within a three-dimensional fibrin matrix. BMPCs were suspended in a fibrin gel, pipetted into the trough of Flexcell Tissue-Train plates, and stimulated with 10% longitudinal cyclic stretch at 1 Hz for 6 days. Unconstrained (stress- and strain-free) and static anchored (constrained but not stretched) samples were used as controls. Stress filament area per cell was increased in the stretched samples compared to static anchored and free-float controls. Cells in the free float controls were randomly aligned, while they aligned parallel to the direction of the stress or strain in the other groups. Immunofluorescence suggested an increased expression of smooth muscle markers (smooth muscle alpha actin and h1-calponin) in both stretched and constrained control samples, but not in unconstrained controls. Qualitative assessment suggested that collagen production was increased in both mechanically stimulated samples. Proliferation was inhibited in stretched samples compared to the constrained controls. This work suggests an ability of rat BMPCs to differentiate toward a smooth-muscle-cell-like lineage when exposed to biomechanical stimulation in a three-dimensional model. The observation that the constrained samples induced changes in BMPCs suggests that stress alone may be stimulatory, but addition of cyclic stretch appears to augment the responses.