Palladin is a widely expressed actin-associated protein localized at stress fibers, focal adhesions, and other actin-based structures, playing a significant role in cell adhesion and cell motility. Knockout of Palladin in mice is embryonic lethal, demonstrating the importance of Palladin in development yet its role in the vasculature is not known. In the present study, smooth muscle cell (SMC) markers, such as myosin, actin, caldesmon, calponin, and LPP, were down-regulated in embryoid bodies (EBs) derived from embryonic stem cells lacking Palladin. Transgenic embryonic stem cell lines were generated that stably expressed a puromycin-resistance gene under the control of a SM alpha-actin (SMA) promoter. Negative selection was then used to purify SMCs from EBs. Purified SMCs expressing multiple SMC markers were designated APSCs (SMA-puromycin-selected cells). Palladin null APSCs express significantly less myosin, actin, calponin, and h-caldesmon. The filamentous (F) to globular (G) actin ratio, known to regulate myocardin family transcription factors, was also decreased. Palladin null APSCs showed increased cell adhesion and decreased cell motility. Importantly, Palladin null APSCs within collagen gels generated less maximum contractile force when stimulated with endothelin-1, sphingosine 1-phosphate (S1P), and thrombin. Myosin light chains (MLC20) were phosphorylated by lysophosphatidic acid to the same extent in Palladin null and wild type APSCs but myosin content/total protein was reduced by >50%, consistent with the observed decreases in contractility. All together, these results suggest that Palladin is essential for expression of the full complement of contractile proteins necessary for optimal force development of SMCs derived from EBs.