Objective The objective of this study is to investigate the role and underlying mechanism of Olfactomedin 2 (Olfm2) in SMC phenotypic modulation and vascular remodeling. Approach and Results Platelet-derived growth factor-BB (PDGF-BB) induces Olfm2 expression in primary SMCs while modulating SMC phenotype as shown by the down-regulation of SMC marker proteins. Knockdown of Olfm2 blocks PDGF-BB-induced SMC phenotypic modulation, proliferation and migration. Conversely, Olfm2 overexpression inhibits SMC marker expression. Mechanistically, Olfm2 promotes the interaction of serum response factor with the runt-related transcription factor 2 that is induced by PDGF-BB, leading to a decreased interaction between serum response factor and myocardin, causing a repression of SMC marker gene transcription and consequently SMC phenotypic modulation. Animal studies show that Olfm2 is up-regulated in balloon-injured rat carotid arteries. Knockdown of Olfm2 effectively inhibits balloon injury-induced neointima formation. Importantly, knockout of Olfm2 in mice profoundly suppresses wire injury-induced neointimal hyperplasia while restoring SMC contractile protein expression, suggesting that Olfm2 plays a critical role in SMC phenotypic modulation in vivo. Conclusions Olfm2 is a novel factor mediating SMC phenotypic modulation. Thus, Olfm2 may be a potential target for treating injury-induced proliferative vascular diseases.