Amniotic fluid (AF) is the liquid layer that provides mechanical support and allows movement of the fetus during embryogenesis. Mesenchymal stem cells (MSCs), which have differentiation capacity, are also found in AF-derived cells at a low ratio. Smooth muscle cells (SMCs) play an important role in organ function and are frequently used in tissue engineering. We examined the differentiation of AF-derived MSCs (AMSCs) into SMCs. AMSCs were sorted from cultured amniotic cells and differentiated into SMCs using differentiation agents, including platelet-derived growth factor BB (PDGF-BB) and tumor growth factor β (TGF-β). Characterization of differentiated SMCs was confirmed morphologically, molecularly (via quantitative polymerase chain reaction [qPCR] and immunocytochemistry [ICC]), and functionally (using a contractile assay and fluo-4 calcium signaling assay). Poly(lactide-co-glycolide) (PLGA) scaffolds were fabricated, and the attachment capacity of AMSCs was assessed via scanning electron microscopy. AMSCs were successfully differentiated into SMCs. Our results indicate that AMSCs change their morphology and exhibit increased expression of ACTA2 and MYH11, which was confirmed via qPCR and ICC. Furthermore, functional experiments revealed that differentiated SMCs had both contraction ability and increased Ca2 concentration in the cytoplasm. Finally, PLGA scaffolds were prepared and AMSCs were successfully planted onto the scaffolds. The AMSCs fully differentiated into functional SMCs, and the PLGA polymer is a suitable scaffold material for AMSCs. With further clinical trials, AF-derived MSC-based SMC engineering may become a highly efficient treatment option.