Arteriogenesis requires smooth muscle cell (SMC) investment of endothelial tubes to build the arterial wall. In preliminary studies in mice, inactivation of SMC β-catenin, a downstream mediator of canonical Wnt signaling and a key element of the structural cadherin-catenin complex, caused embryonic demise with apparent vascular enlargement and hemorrhage. In detailed analysis, we found that SMC β-catenin is required for arteriogenesis: embryos lacking SMC β-catenin (SMKO) died by E12.5 (93 embryos and 215 pups analyzed) with impaired arterial maturation, with thinner aortic walls by E10.5 (SMKO vs. WT p<0.0001, n=8) due to impaired SMC investment, decreased cell proliferation (E9.5 to E11.5 SMKO vs. WT p5), and increased apoptosis (E11.5 SMKO n=11 vs. WT n=18, p<0.05). Interestingly, β-catenin-deficient SMCs had impaired growth and survival and increased p53 activity, though p53 levels were unchanged. In vivo, SMC p53 inactivation suppressed phenotypes caused by loss of β-catenin: at E12.5, no β-catenin SMKOs looked normal, with 21% and 79% in early and advanced resorption, respectively; in contrast, 23% of p53/β-catenin double SMKOs looked normal, with 36% and 41% in early and advanced resorption, respectively (β-catenin SMKO n=29 vs. double SMKO n=22, p<0.01). Double SMKOs showed marked recovery of arterial wall formation. Mechanistically, signals from β-catenin’s C-terminal, but not N-terminal, interaction domain repressed p53 transcriptional activity in cultured SMCs (p<0.01, n=3). In vivo, studies of three different β-catenin knockin mutants showed that β-catenin signaling was required in SMCs, while structural function was not sufficient for arteriogenesis, as a structurally-competent but signaling-inert mutant β-catenin (n=11) phenocopied the SMKO (n=29). Moreover, signals from the C-terminal interaction domain were both required and generally sufficient for arteriogenesis: expression of a C-terminus β-catenin mutant in SMCs caused embryonic lethality (83 pups analyzed), while an N-terminus mutant permitted normal development (101 pups analyzed). Thus, SMC β-catenin-mediated repression of p53 is required for arteriogenesis, and its C-terminal interaction domain is important for this novel developmental role.