Although evidence from culture studies implicates the angiotensin II type 2 receptor (AT2R) in the regulation of growth and differentiation of arterial smooth muscle (SM) cells (SMC), the lack of its expression in adult arteries has precluded direct investigation of its role in vivo. The goal of the present study was to determine the role of AT2R in the control of fetal SMC growth, contractility, and differentiation during vascular development. Determination of isometric tension in fetal aortas showed potentiated angiotensin II (AII)-induced contraction by treatment with the selective AT2R antagonist PD123319, demonstrating the presence of functional AT2Rs that mediate reduced force development in vascular SMC. In direct contrast to numerous cell culture studies, proliferation indices were decreased rather than increased in aortic SMC of fetal homozygous AT2R knockout as compared to wild type or heterozygous knockout mice. Experiments using SMC tissues from heterozygous female AT2R knockout mice, that are naturally occurring chimeras for AT2R expression, showed that AT2R mRNA expression was exactly 50% of that of wild type. This indicated that loss of AT2R expression did not confer a selective advantage or disadvantage for SMC lineage determination and expansion. Real time RT-PCR analyses showed no significant difference in expression of SM--actin (SMA), SM myosin heavy chain (SMMHC) and myocardin in various SM tissues from all three genotypes, suggesting that knockout of AT2R had no effect on subsequent SMC differentiation. Taken together, results indicate that functional AT2 receptors are expressed in fetal aorta and mediate reduced force development, but do not significantly contribute to regulation of SMC differentiation.