There is clear evidence that the phenotypic modulation of smooth muscle cells (SMCs) contributes to the pathophysiology of vascular disease. Phenotypic modulation refers to the unique ability of SMCs to alter their phenotype in response to extracellular stimuli and is hallmarked by the loss of SMC marker gene expression. The transcription factor Krüppel-like factor 4 (KLF4) is a known powerful negative regulator of SMC marker gene expression that works, in part, by decreasing the expression of the serum response factor (SRF) myocardin. KLF4 is not expressed in healthy adult SMCs but is increased in SMCs in response to vascular injury in vivo or PDGF-BB treatment in vitro. The aim of the present study was to determine the molecular mechanisms that regulate the expression of KLF4 in phenotypically modulated SMCs. The results demonstrated that the transcription factor stimulating protein-1 (Sp1) regulated the expression of KLF4 in SMCs. The KLF4 promoter contains three consensus Sp1 binding sites. Using a series of truncated KLF4 promoters, we showed that only fragments containing these Sp1 sites could be activated by PDGF-BB. In addition, overexpression of Sp1 alone was sufficient to increase the activity of the KLF4 promoter. Moreover, inhibiting Sp1 expression with small-interfering RNA attenuated the effects of PDGF-BB on KLF4 expression. Mutation of the three Sp1 sites within the KLF4 promoter abolished both baseline and PDGF-BB-induced activity. Finally, the results demonstrated enhanced Sp1 binding to the KLF4 promoter in SMCs treated with PDGF-BB in vitro and following vascular injury in vivo. Taken together, the results suggest a novel role for Sp1 in increasing the expression of KLF4 in phenotypically modulated SMCs.