Rationale: Imbalance in TGF-β signaling molecules SMAD2/3 and SMAD1/5/9 is a key driver of vascular dysfunction and pulmonary arterial hypertension (PAH) pathophysiology. KER-012, a novel ActRIIB ligand trap, designed to bind activin (Act) A and ActB to inhibit SMAD2/3: thereby permitting bone morphogenic protein (BMP) ligand signaling via SMAD1/5/9 to potentially rebalance TGF-β signaling and restore vascular homeostasis in PAH and associated disorders. Methods: Using hypoxia (1% O2) to mimic the pulmonary cell environment of PAH, we evaluated the effect of KER-012 or RKER -012 (a research form of KER-012) on TGF-β signaling in human pulmonary arterial endothelial cells (HPAECs) and smooth muscle cells (HPASMCs), two key cell types involved in the vascular remodeling in PAH. Gene expression of hypoxia/normoxia cultured cells was assessed by qPCR, phosphorylation of SMAD2 (pSMAD2) by alphaLISA, and ActA protein levels by ELISA. Results: HPAECs and HPASMCs both responded to TGF-β ligands implicated in PAH. ActA and Growth Differentiation Factor (GDF)11 increased SMAD2 phosphorylation and BMP9 increased SMAD1 phosphorylation (pSMAD1), confirming activation of the respective signaling pathways. KER-012 inhibited ActA and GDF11 induced pSMAD2, but not BMP9 induced pSMAD1. In hypoxic HPAECs, ActA gene expression increased >3-fold and BMPR2 expression decreased >2-fold relative to normoxia. ActA protein levels from hypoxic HPAEC supernatant also increased 10-fold, which was associated with an observed increase in pSMAD2 activation. While RKER-012 did not affect ActA gene expression, it did reduce ActA protein levels in supernatant to normoxic levels. This reduction in ActA may represent the fraction not bound to RKER-012, and potentially demonstrates a reduction in ActA availability for SMAD2/3 activation. Conclusions: ActA inhibition by RKER-012 restored homeostatic SMAD2 signaling in HPAECs and HPASMCs in an in vitr o PAH hypoxia model. RKER012 has also shown not to effect BMP signaling in these cells. These studies suggest that RKER-012 can potentially correct imbalanced SMAD signaling in PAH, partially via binding and inhibition of ActA protein.