There has been considerable controversy regarding the lineage relationship between smooth muscle cells (SMCs) and myofibroblasts, because they express a number of common cell-selective markers including smooth muscle (SM) alpha-actin. We have shown previously that MCAT elements within the SM alpha-actin promoter confer differential activity in cultured SMCs versus myofibroblasts. In the present study, to determine the role of MCAT elements in vivo, we generated transgenic mice harboring an SM alpha-actin promoter-enhancer-LacZ reporter gene containing MCAT element mutations and compared transgene expression patterns with wild-type SM alpha-actin promoter-enhancer-LacZ transgenic mice. Results showed no differences in LacZ expression patterns in adult SMC-containing tissues. However, of interest, mutations of MCAT elements selectively abolished transgene expression in myofibroblasts within granulation tissue of skin wounds. In addition, mutations of MCAT elements caused a delay in the induction of transgene expression in SMCs, as well as loss of expression in cardiac and skeletal muscles during embryogenesis. Results of small interfering RNA-induced knockdown experiments showed that RTEF-1 regulated SM alpha-actin transcription in myofibroblasts, but not in differentiated SMCs. Moreover, quantitative chromatin immunoprecipitation assays revealed that RTEF-1 bound to the MCAT element-containing region within the SM alpha-actin promoter in myofibroblasts, whereas transcriptional enhancer factor (TEF)-1 was bound to the same region in differentiated SMCs. These results provide novel evidence that, although both SMCs and myofibroblasts express SM alpha-actin, they use distinct transcriptional control mechanisms for regulating its expression. Results also indicate that the MCAT element-mutated SM alpha-actin promoter-enhancer is a useful tool to direct gene expression selectively in differentiated SMCs.