Phorbol ester triggers the conversion of focal adhesions into podosomes in A7r5 smooth muscle cells. Here we followed the dynamics of podosome formation using dual fluorescence live video and confocal microscopy, as well as interference reflection and evanescent wave microscopy. We show that podosomes form at the outer region of stress fiber bundles, at specialized sites where they are embedded in adhesion plaques at the basal surface of the plasma membrane, and that cortactin resides constitutively at these microdomains. We further demonstrate that the formation of podosomes requires Arp2/3-dependent actin polymerization at the stress fiber-focal adhesion interface. Concentration of Arp2/3 coincides with podosome formation and precedes the engagement of SM22 and alpha-actinin, while the focal adhesion components zyxin and vinculin redistribute only at later stages of podosome development. We thus suggest that the genesis of podosomes includes two steps, one requiring the early de novo polymerization of actin filaments, and a second, late phase characterized by the recruitment of focal adhesion components. Moreover, we provide evidence for the existence of an as yet unidentified region in close proximity to the focal adhesion-stress fiber interface, which marks the site of actin cytoskeleton remodeling and is a novel site of Arp2/3-dependent F-actin polymerization.