Smooth muscle cells (SMCs) display remarkable phenotypic diversity and plasticity and can readily switch between proliferative and differentiated states in response to extracellular cues. In an effort to identify novel transcriptional regulators of smooth muscle phenotypes, we compared the gene expression profiles of arterial and venous SMCs by microarray-based transcriptional profiling. Among numerous genes displaying distinct expression patterns in these two SMC types, we discovered an expressed sequence tag encoding a previously uncharacterized zinc finger protein belonging to the PRDM (PRDI-BF1 and RIZ homology domain) family of chromatin-remodeling proteins and named it PRISM (PR domain in smooth muscle). PRISM is expressed in a variety of smooth muscle-containing tissues and displays especially robust expression in the cardiac outflow tract and descending aorta during embryogenesis. PRISM is localized to the nucleus and contains an amino-terminal PR domain and four Krüppel-like zinc fingers at the carboxy terminus. We show that PRISM acts as a transcriptional repressor by interacting with class I histone deacetylases and the G9a histone methyltransferase, thereby identifying PRISM as a novel SMC-restricted epigenetic regulator. Overexpression of PRISM in cultured primary SMCs induces genes associated with the proliferative smooth muscle phenotype while repressing regulators of differentiation, including myocardin and GATA-6. Conversely, small interfering RNA-mediated knockdown of PRISM slows cell growth and induces myocardin, GATA-6, and markers of SMC differentiation. We conclude that PRISM acts as a novel epigenetic regulator of SMC phenotypic plasticity by suppressing differentiation and maintaining the proliferative potential of vascular SMCs.