The dedifferentiation and subsequent proliferation of vascular smooth muscle cells (VSMCs) are likely to be key events in the development of many vascular diseases. In the intact vessel, VSMCs are embedded in an interstitial matrix composed predominantly of collagen type 1 and fibronectin and are surrounded by a basement membrane consisting of collagen type IV, laminin and other components. When removed from the vessel and plated on tissue culture plastic in media containing serum, VSMCs proliferate, dedifferentiate, and excrete matrix metalloproteinases (MMPs). Since the extracellular matrix (ECM) can play an important role in controlling the proliferation and differentiation of cells in many other tissues, we examined the effect of a reconstituted basement membrane (Matrigel) on the behavior of isolated VSMCs. In contrast to their behavior on plastic, VSMCs plated on matrigel did not proliferate or initiate new DNA synthesis, even when cell density was subconfluent and serum growth factors were maintained in the medium. Instead, the cells migrated to form a multicellular network exhibiting a cellular organization similar to that seen in the aorta. Electron microscopy of these cells revealed the presence of contractile elements within the cell, while Northern and Western analyses indicated that smooth muscle-specific mRNAs and proteins were re-expressed by these cells. In addition, VSMCs on matrigel no longer expressed a proliferation-dependent gene with homology to mouse ID (Inhibitor of Differentiation), which was expressed at high levels in proliferating VSMCs and, in skeletal muscle, acts as a transdominant suppressor of biochemical differentiation. These results suggest that the extracellular matrix surrounding VSMCs in vivo plays an important role in controlling their proliferation and differentiation.