Phenotypic switching of smooth muscle cells (SMCs) plays a key role in vascular proliferative diseases. We previously showed that Krüppel-like factor 4 (Klf4) suppressed SMC differentiation markers in cultured SMCs. Here, we derive mice deficient for Klf4 by conditional gene ablation and analyze their vascular phenotype following carotid injury. Klf4 expression was rapidly induced in SMCs of control mice after vascular injury but not in Klf4-deficient mice. Injury-induced repression of SMC differentiation markers was transiently delayed in Klf4-deficient mice. Klf4 mutant mice exhibited enhanced neointimal formation in response to vascular injury caused by increased cellular proliferation in the media but not an altered apoptotic rate. Consistent with these findings, cultured SMCs overexpressing Klf4 showed reduced cellular proliferation, in part, through the induction of the cell cycle inhibitor, p21^WAF1/Cip1 via increased binding of Klf4 and p53 to the p21^WAF1/Cip1 promoter/enhancer. In vivo chromatin immunoprecipitation assays also showed increased Klf4 binding to the promoter/enhancer regions of the p21^WAF1/Cip1 gene and SMC differentiation marker genes following vascular injury. Taken together, we have demonstrated that Klf4 plays a critical role in regulating expression of SMC differentiation markers and proliferation of SMCs in vivo in response to vascular injury.