DiGeorge Critical Region 8 (DGCR8) is a double-stranded RNA-binding protein that interacts with Drosha and facilitates microRNA (miRNA) maturation. However, the role of DGCR8 in vascular smooth muscle cells (VSMCs) is not well understood. To investigate whether DGCR8 contributes to miRNA maturation in VSMCs, we generated DGCR8 conditional knockout (cKO) mice by crossing VSMC-specific Cre mice (SM22-Cre) with DGCR8(loxp/loxp) mice. We found that loss of DGCR8 in VSMCs resulted in extensive liver hemorrhage and embryonic mortality between embryonic days (E) 12.5 and E13.5. DGCR8 cKO embryos displayed dilated blood vessels and disarrayed vascular architecture. Blood vessels were absent in the yolk sac of DGCR8 KOs after E12.5. Disruption of DGCR8 in VSMCs reduced VSMC proliferation and promoted apoptosis in vitro and in vivo. In DGCR8 cKO embryos and knockout VSMCs, differentiation marker genes, including αSMA, SM22, and CNN1, were significantly down-regulated, and the survival pathways of ERK1/2 mitogen-activated protein kinase and the phosphatidylinositol 3-kinase/AKT were attenuated. Knockout of DGCR8 in VSMCs has led to down-regulation of the miR-17/92 and miR-143/145 clusters. We further demonstrated that the miR-17/92 cluster promotes VSMC proliferation and enhances VSMC marker gene expression, which may contribute to the defects of DGCR8 cKO mutants. Our results indicate that the DGCR8 gene is required for vascular development through the regulation of VSMC proliferation, apoptosis, and differentiation.