Smooth muscle cells (SMCs) are key regulators of vascular disease and circulating smooth muscle progenitor cells may play important roles in vascular repair or remodelling. We developed enhanced protocols to derive smooth muscle progenitors from murine bone marrow and tested whether factors that are increased in atherosclerotic plaques, namely platelet-derived growth factor-BB (PDGF-BB) and monomeric collagen, can influence the smooth muscle specific differentiation, proliferation, and survival of mouse bone marrow-derived progenitor cells. During a 21 day period of culture, bone marrow cells underwent a marked increase in expression of the SMC markers α-SMA (1.93 ± 0.15 vs. 0.0008 ± 0.0003 (ng/ng GAPDH) at 0 d), SM22-α (1.50 ± 0.27 vs. 0.005 ± 0.001 (ng/ng GAPDH) at 0 d) and SM-MHC (0.017 ± 0.004 vs. 0.001 ± 0.001 (ng/ng GAPDH) at 0 d). Bromodeoxyuridine (BrdU) incorporation experiments showed that in early culture, the smooth muscle progenitor subpopulation could be identified by high proliferative rates prior to the expression of smooth muscle specific markers. Culture of fresh bone marrow or smooth muscle progenitor cells with PDGF-BB suppressed the expression of α-SMA and SM22-α, in a rapidly reversible manner requiring PDGF receptor kinase activity. Progenitors cultured on polymerized collagen gels demonstrated expression of SMC markers, rates of proliferation and apoptosis similar to that of cells on tissue culture plastic; in contrast, cells grown on monomeric collagen gels displayed lower SMC marker expression, lower growth rates (319 ± 36 vs. 635 ± 97 cells/mm2), and increased apoptosis (5.3 ± 1.6% vs. 1.0 ± 0.5% (Annexin 5 staining)). Our data shows that the differentiation and survival of smooth muscle progenitors are critically affected by PDGF-BB and as well as the substrate collagen structure.