Immediately after birth the adluminal vascular SMCs of the pulmonary elastic arteries undergo transient actin cytoskeletal remodeling as well as cellular de-differentiation and proliferation. Vascular smooth muscle phenotype is regulated by serum response factor, which is itself regulated in part by the negative regulator YY1. We therefore studied the subcellular localization of YY1 in arteries of normal newborn piglets and piglets affected by neonatal pulmonary hypertension. We found that YY1 localization changed during development and that expression of gamma-smooth muscle actin correlated with expression of cytoplasmic rather than nuclear YY1. Analysis of the regulation of YY1 localization in vitro demonstrated that polymerized gamma-actin sequestered EGFP-YY1 in the cytoplasm and that YY1 activation of c-myc promoter activity was inhibited by LIM kinase, which increases actin polymerization. Consistent with these data siRNA-mediated down-regulation of YY1 in C2C12 cells increased SM22-alpha expression and inhibited cell proliferation. Thus, actin polymerization controls subcellular YY1 localization, which contributes to vascular SMC proliferation and differentiation in normal pulmonary artery development. In the absence of actin depolymerization, YY1 does not relocate to the nucleus, and this lack of relocation may contribute to the pathobiology of pulmonary hypertension.