Accruing evidence illustrates an emerging paradigm of dynamic vascular smooth muscle cell (SMC) transdifferentiation during atherosclerosis progression. However, the molecular regulators that govern SMC phenotype diversification remain poorly defined. This study aims to elucidate the functional role and underlying mechanisms of cellular communication network factor 2 (CCN2), a matricellular protein, in regulating SMC plasticity in the context of atherosclerosis. In both human and murine atherosclerosis, an up-regulation of CCN2 is observed in transdifferentiated SMCs. Using an inducible murine SMC CCN2 deletion model, we demonstrate that SMC-specific CCN2 knockout mice are hypersusceptible to atherosclerosis development as evidenced by a profound increase in lipid-rich plaques along the entire aorta. Single-cell RNA sequencing studies reveal that SMC deficiency of CCN2 positively regulates machinery involved in endoplasmic reticulum stress, endocytosis, and lipid accumulation in transdifferentiated macrophage-like SMCs during the progression of atherosclerosis, findings recapitulated in CCN2-deficient human aortic SMCs. Our studies illuminate an unanticipated protective role of SMC-CCN2 against atherosclerosis. Disruption of vascular wall homeostasis resulting from vascular SMC CCN2 deficiency predisposes mice to atherosclerosis development and progression.