Following initial patterning as differentiated smooth muscle (SM) cells, the muscularis externa of the murine esophagus is replaced by skeletal muscle, but the mechanism underlying this process is controversial. The hypothesis that committed SM cells transdifferentiate into striated muscle is not consistent with fate mapping studies. Similarly, apoptosis does not fully explain the process. Using immunohistochemical techniques and transgenic mice that express eGFP and Cre-recombinase exclusively in SM, we have identified a population of remnant SM cells that persist throughout the developing and mature murine esophagus. These cells display an atypical phenotype, are not associated with microvasculature, but are often apposed to cKit positive, interstitial cells of Cajal. The absolute length of the SM component of the developing esophagus remains constant during a period when total esophageal length increases 4-fold, resulting in a small maintained distal segment of smooth muscle. Esophageal SM cells fail to express myogenin during development, and striated muscle cell precursors expressing myogenin fail to express specific SM cell markers, indicating that they did not transdifferentiate from SM cells. Moreover, smooth muscle-specific myogenin inactivation has no effect on esophageal skeletal myogenesis. Taken together, our results provide an alternative hypothesis regarding the fate of SM cells in the developing murine esophagus, which does not invoke apoptosis or transdifferentiation.