Three-dimensional gel culture systems represent conditions that mimic the differentiated state of mesenchymal cells in vivo. We examined gel contraction, cell growth, and phenotypic modulation of rabbit arterial SMC in three-dimensional gel culture. The gel contraction rate was dependent on the collagen type; that is, the contraction by freshly isolated SMC was faster and more pronounced in type I collagen than in type III collagen. In contrast, the phenotypic modulation of SMC was independent of collagen type. The major portion of cells in both type I and III collagens with growth factors underwent transition from a contractile (G0 phase) to a synthetic phenotype (G1B phase), but this transition was clearly delayed compared with that on collagens. The cells had hardly begun DNA synthesis in either collagen type and failed to proliferate even after 10 days of culture. These results indicate that collagen type is important in gel contraction by vascular SMC, while the organization of collagen fibrils (two-dimensional vs three-dimensional) is more critical in the phenotypic transition and proliferation of these cells. However, the more specific organization of extracellular matrix than the collagen gel culture system may be necessary to maintain the contractile phenotype of SMC.