Lipid accumulation by vascular smooth muscle cells (VSMC) is a feature of atherosclerotic plaques. In this study we describe two mechanisms whereby human VSMC foam cell formation is driven by de novo synthesis of fatty acids leading to triacylglycerol accumulation in intracellular vacuoles, a process distinct from serum lipoprotein uptake. VSMC cultured in adipogenic differentiation medium accumulated lipids and were induced to express the adipocyte marker genes adipsin, adipocyte fatty acid-binding protein, C/EBPalpha, PPARgamma, and leptin. However, complete adipocyte differentiation was not observed as numerous genes present in mature adipocytes were not detected, and the phenotype was reversible. The rate of lipid accumulation was not affected by PPARgamma agonists, but screening for the effects of other nuclear receptor agonists showed that activation of the liver X receptors (LXR) dramatically promoted lipid accumulation in VSMC. Both LXRalpha and LXRbeta were present in VSMC, and their activation with TO901317 resulted in induction of the lipogenic genes fatty acid synthetase, sterol regulatory element binding protein (SREBP1c), and stearoyl-CoA desaturase. 27-Hydroxycholesterol, an abundant oxysterol synthesized by VSMC acted as an LXR antagonist and, therefore, may have a protective role in preventing foam cell formation. Immunohistochemistry showed that VSMC within atherosclerotic plaques express adipogenic and lipogenic markers, suggesting these pathways are present in vivo. Moreover, the development of an adipogenic phenotype in VSMC is consistent with their known phenotypic plasticity and may contribute to their dysfunction in atherosclerotic plaques and, thus, impinge on plaque growth and stability.