Smooth muscle cell (SMC) differentiation and proliferation occur simultaneously during embryonic development. The underlying mechanisms especially common factors regulating both processes, however, remain largely unknown. The present study has identified cell division cycle 7 (Cdc7) as one of the factors mediating both the proliferation and SMC differentiation. TGF-β induces Cdc7 expression and phosphorylation in the initial phase of SMC differentiation of pluripotent mesenchymal C3H10T1/2 cells. Cdc7 specific inhibitor or shRNA knockdown suppresses TGF-β-induced expression of SMC early markers including α-SMA, SM22α, and calponin. Cdc7 overexpression, on the other hand, enhances SMC marker expression. Cdc7 function in inducing SMC differentiation is independent of Dumbbell former 4 or Dbf4, the catalytic subunit of Cdc7 critical for cell proliferation, suggesting that Cdc7 mediates SMC differentiation through a mechanism distinct from cell proliferation. Cdc7 regulates SMC differentiation via activating SMC marker gene transcription. Knockdown of Cdc7 by shRNA inhibits SMC marker gene promoter activities. Mechanistically, Cdc7 interacts with Smad3 to induce SMC differentiation. Smad3 is required for Cdc7 function in inducing SMC promoter activities and marker gene expression. Likewise, Cdc7 enhances Smad3 binding to SMC marker promoter via supporting Smad3 nuclear retention and physically interacting with Smad3. Taken together, our studies have demonstrated a novel role of Cdc7 in SMC differentiation.