The platelet-derived growth factor (PDGF) signaling pathway is a critical regulator of animal development and homeostasis. Activation of the PDGF pathway leads to neointimal proliferative responses to artery injury; it promotes a switch of vascular smooth muscle cells (vSMC) to a less contractile phenotype by inhibiting the SMC-specific gene expression and increasing the rate of proliferation and migration. The molecular mechanism for these pleiotropic effects of PDGFs has not been fully described. Here, we identify the microRNA-221 (miR-221), a small noncoding RNA, as a modulator of the phenotypic change of vSMCs in response to PDGF signaling. We demonstrate that miR-221 is transcriptionally induced upon PDGF treatment in primary vSMCs, leading to down-regulation of the targets c-Kit and p27Kip1. Down-regulation of p27Kip1 by miR-221 is critical for PDGF-mediated induction of cell proliferation. Additionally, decreased c-Kit causes inhibition of SMC-specific contractile gene transcription by reducing the expression of Myocardin (Myocd), a potent SMC-specific nuclear coactivator. Our study demonstrates that PDGF signaling, by modulating the expression of miR-221, regulates two critical determinants of the vSMC phenotype; they are SMC gene expression and cell proliferation.