Smooth muscle cells switch between differentiated and proliferative phenotypes in response to extracellular cues, but the transcriptional mechanisms that confer such phenotypic plasticity remain unclear. Serum response factor (SRF) activates genes involved in smooth muscle differentiation and proliferation by recruiting muscle-restricted cofactors, such as the transcriptional coactivator myocardin, and ternary complex factors (TCFs) of the ETS-domain family, respectively^,,,,,,,. Here we show that growth signals repress smooth muscle genes by triggering the displacement of myocardin from SRF by Elk-1, a TCF that acts as a myogenic repressor. The opposing influences of myocardin and Elk-1 on smooth muscle gene expression are mediated by structurally related SRF-binding motifs that compete for a common docking site on SRF. A mutant smooth muscle promoter, retaining responsiveness to myocardin and SRF but defective in TCF binding, directs ectopic transcription in the embryonic heart, demonstrating a role for TCFs in suppression of smooth muscle gene expression in vivo. We conclude that growth and developmental signals modulate smooth muscle gene expression by regulating the association of SRF with antagonistic cofactors.