Myocardin and the myocardin-related transcription factors (MRTFs) A and B act as coactivators for serum response factor, which plays a key role in cardiovascular development. To determine the functions of MRTF-B in vivo, we generated MRTF-B mutant mice by targeted inactivation of the MRTF-B gene. We show that mice homozygous for an MRTF-B loss-of-function mutation die during mid-gestation from a spectrum of cardiovascular defects that includes abnormal patterning of the branchial arch arteries, double-outlet right ventricle, ventricular septal defects, and thin-walled myocardium. These abnormalities are accompanied by a failure in differentiation of smooth muscle cells within the branchial arch arteries, which are derived from the neural crest. The phenotype of MRTF-B mutant mice is distinct from that of mice lacking myocardin, revealing unique roles for these serum response factor coactivators in the development of different subsets of smooth muscle cells in vivo.