We have recently characterized the promoter region of the rabbit embryonic smooth muscle myosin heavy chain (SMemb/NMHC-B) gene and identified the 15-bp sequence, designated SE1, located at −105 from the transcriptional start site as an important regulatory element for its transcriptional activity in a smooth muscle cell (SMC) line. In this study, we attempted to isolate cDNA clones encoding for the transcription factors that control the expression of the SMemb gene through binding to this cis-regulatory element. We screened a λgt11 cDNA library prepared from C2/2 cells, a rabbit-derived SMC line, by using a radiolabeled concatenated oligonucleotide containing SE1 as a probe. Sequence analysis revealed that one of the cDNA clones corresponds to the rabbit homologue of basic transcriptional element binding protein-2 (BTEB2), which has previously been identified as one of the Krüppel-like transcription factor. Gel mobility shift assays and antibody supershift analyses with nuclear extracts from C2/2 cells indicate that BTEB2 is a major component of nuclear factor:SE1 complexes. Furthermore, a glutathione S-transferase-BTEB2 fusion protein binds to the SE1 in a sequence-specific manner. In support of the functionality of BTEB2 binding, basal promoter activity and BTEB2-induced transcriptional activation were markedly attenuated by the disruption of the SE1. In adult rabbit tissues, BTEB2 mRNA was most highly expressed in intestine, urinary bladder, and uterus. BTEB2 mRNA levels were downregulated in rabbit aorta during normal development. Moreover, immunohistochemical analysis indicated a marked induction of BTEB2 protein in the neointimal SMC after balloon injury in rat aorta. These results suggest that BTEB2 mediates the transcriptional regulation of the SMemb/NMHC-B gene and possibly plays a role in regulating gene expression during phenotypic modulation of vascular SMC.