Formation of a fully functional artery proceeds through a multistep process. Here we show that Notch3 is required to generate functional arteries in mice by regulating arterial differentiation and maturation of vascular smooth muscle cells (vSMC). In adult Notch3^–/– mice distal arteries exhibit structural defects and arterial myogenic responses are defective. The postnatal maturation stage of vSMC is deficient in Notch3^–/– mice. We further show that Notch3 is required for arterial specification of vSMC but not of endothelial cells. Our data reveal Notch3 to be the first cell-autonomous regulator of arterial differentiation and maturation of vSMC.