The human cerebral vasculature originates in the fourth week of gestation and continues to expand and diversify well into the first few years of postnatal life. A key feature of this growth is smooth muscle differentiation, whereby smooth muscle cells within cerebral arteries transform from migratory to proliferative to synthetic and finally to contractile phenotypes. These phenotypic transformations can be reversed by pathophysiological perturbations such as hypoxia, which causes loss of contractile capacity in immature cerebral arteries. In turn, loss of contractility affects all whole-brain cerebrovascular responses, including those involved in flow-metabolism coupling, vasodilatory responses to acute hypoxia and hypercapnia, cerebral autoregulation, and reactivity to activation of perivascular nerves. Future strategies to minimize cerebral injury following hypoxia-ischemic insults in the immature brain might benefit by targeting treatments to preserve and promote contractile differentiation in the fetal cerebrovasculature. This could potentially be achieved through inhibition of RTK mediated growth factors, such as VEGF and PDGR, which are mobilized by hypoxic and ischemic injury and which facilitate contractile dedifferentiation. Interruption of the effects of other vascular mitogens, such as endothelin and angiotensin-II, and even some miRNA species, also could be beneficial. Future experimental work that addresses these possibilities offers promise to improve current clinical management of neonates who have suffered and survived hypoxic, ischemic, asphyxic, or inflammatory cerebrovascular insults.