SM-20 encodes an intracellular prolyl hydroxylase that acts on hypoxia inducible factor (HIF)-1α, targeting it for proteasomal degradation. By decreasing HIF-α, SM-20 is thought to modulate the expression of hypoxia-regulated genes. SM-20 expression in the arterial wall is restricted to smooth muscle cells, which play a critical role in atherosclerosis and arterial injury. To further elucidate the regulation of SM-20 in smooth muscle, we cloned and analyzed the rat SM-20 promoter. In transient transfections, the SM-20 promoter displayed ~6-fold greater activity in smooth muscle cells vs. fibroblasts. Deletion analysis and electrophoretic mobility shift assays demonstrated that SM-20 transcription was regulated by two Sp1/Sp3 sites. A shift in binding to the Sp1/Sp3 sites, a decrease in Sp1 and Sp3 protein levels, and the emergence of a lower molecular weight form of Sp1 were seen in serum-deprived or post-confluent SMC, suggesting that SM-20 is regulated during smooth muscle cell differentiation.