RATIONALE: Vascular remodeling in pulmonary arterial hypertension (PAH) results from smooth muscle cell hypertrophy and proliferation of vascular cells. Loss of BMPR-II (bone morphogenetic protein receptor 2) signaling and increased signaling via TGF-β (transforming growth factor β) and its downstream mediators SMAD (small body size [a C. elegans protein] mothers against decapentaplegic [a Drosophila protein family])-2/3 has been proposed to drive lung vascular remodeling; yet, proteomic analyses indicate a loss of SMAD3 in PAH. OBJECTIVES: We proposed that SMAD3 may be dysregulated in PAH and that loss of SMAD3 may present a pathophysiological master switch by disinhibiting its interaction partner, MRTF (myocardin-related transcription factor), which drives muscle protein expression. METHODS: SMAD3 levels were measured in lungs from PAH patients, rats treated either with Sugen/hypoxia or monocrotaline (MCT), and in mice carrying a BMPR2 mutation. In vitro, effects of SMAD3 or BMPR2 silencing or SMAD3 overexpression on cell proliferation or smooth muscle hypertrophy were assessed. In vivo, the therapeutic and prophylactic potential of CCG1423, an inhibitor of MRTF, was investigated in Sugen/hypoxia rats. MEASUREMENTS AND MAIN RESULTS: SMAD3 was downregulated in lungs of patients with PAH and in pulmonary arteries of three independent PAH animal models. TGF-β treatment replicated the loss of SMAD3 in human pulmonary artery smooth muscle cells (huPASMCs) and human pulmonary artery endothelial cells. SMAD3 silencing increased proliferation and migration in huPASMCs and human pulmonary artery endothelial cells. Coimmunoprecipitation revealed reduced interaction of MRTF with SMAD3 in TGF-β-treated huPASMCs and pulmonary arteries of PAH animal models. In huPASMCs, loss of SMAD3 or BMPR-II increased smooth muscle actin expression, which was attenuated by MRTF inhibition. Conversely, SMAD3 overexpression prevented TGF-β-induced activation of an MRTF reporter and reduced actin stress fibers in BMPR2-silenced huPASMCs. MRTF inhibition attenuated PAH and lung vascular remodeling in Sugen/hypoxia rats. CONCLUSIONS: Loss of SMAD3 presents a novel pathomechanism in PAH that promotes vascular cell proliferation and-via MRTF disinhibition-hypertrophy of huPASMCs, thereby reconciling the parallel induction of a synthetic and contractile huPASMC phenotype.