Smooth muscle cells (SMCs) play critical roles in a number of diseases; however, the molecular mechanism underlying their development is unclear. Although the role of TGFβ1 signaling in SMC development is well established, the downstream molecular signals are not fully understood. We used several rat multipotent adult progenitor cell ((r)MAPC) lines that express levels of Oct4 mRNA similar to hypoblast stem cells (HypoSC), and can differentiate robustly to mesodermal and endodermal cell types. TGFβ1 alone, or with PDGF-BB, induces differentiation of rMAPCs to SMCs, which expressed structural SMC proteins, including α-smooth muscle actin (αSMA), and contribute to the SMC coat of blood vessels in vivo. A genome-wide time-course transcriptome analysis revealed that transcripts of Baf60c, part of the SWI/SNF actin binding chromatin remodeling complex D-3 (SMARCD3/BAF60c), were significantly induced during MAPC-SMC differentiation. We demonstrated that BAF60c is a necessary co-regulator of TGFβ1 mediated induction of SMC genes. Knock-down of Baf60c decreased SMC gene expression in rMAPCs whereas ectopic expression of Baf60c was sufficient to commit rMAPCs to SMCs in the absence of exogenous cytokines. TGFβ1 activates Baf60c via the direct binding of SMAD2/3 complexes to the Baf60c promoter region. Chromatin- and co-immunoprecipitation studies demonstrated that regulation of SMC genes by BAF60c is mediated via interaction with SRF binding CArG box-containing promoter elements in SMC genes. We noted that compared with TGFβ1, Baf60c overexpression in rMAPC yielded SMC with a more immature phenotype. Similarly, Baf60c induced an immature phenotype in rat aortic SMCs marked by increased cell proliferation and decreased contractile marker expression. Thus, Baf60c is important for TGFβ-mediated commitment of primitive stem cells (rMAPCs) to SMCs and is associated with induction of a proliferative state of quiescent SMCs. The MAPC-SMC differentiation system may be useful for identification of additional critical (co-)regulators of SMC development.