We have previously reported that platelet activating factor (PAF) is present in very high levels in the ovine fetal lung and circulation and that PAF serves as an important physiological vasoconstrictor of the pulmonary circulation in utero. However, it is not known if PAF stimulates pulmonary vascular smooth muscle cell (SMC) proliferation. In this study, we used ovine fetal pulmonary venous smooth muscle cells as our model system to study the effects and mechanisms of action of PAF on SMC proliferation. We found that PAF induced SMC proliferation in a dose-dependent manner. PAF also stimulated activation of both ERK and p38, but not JNK MAP kinase pathways. 10 nM PAF induced phosphorylation of epidermal growth factor receptor (EGFR). Specific inhibition of EGFR by AG1478 and by the expression of a dominant-negative EGFR mutant in SMCs attenuated PAF-stimulated cell proliferation. Inhibition of heparin-binding EGF-like growth factor (HB-EGF) release by CRM197 and inhibition of matrix metalloproteinases (MMP) by GM6001 abolished PAF-induced MAP kinase activation and cell proliferation. Increased alkaline phosphatase (AP) activity after PAF treatment in AP-HB-EGF fusion construct-transfected SMCs indicated that PAF induced the release of HB-EGF within 1 min. Gelatin zymography data showed that PAF stimulated MMP-2 activity and MMP-9 activity within 1 min. These results suggest that PAF promotes pulmonary vascular SMC proliferation via transactivation of EGFR through MMP activation and HB-EGF, resulting in p38 and ERK activation and that EGFR transactivation is essential for the mitogenic effect of PAF in pulmonary venous SMC.