Remodeling of the actin cytoskeleton is a critical early step in skeletal muscle differentiation. Smooth muscle alpha-actin (SMA) is one of the earliest markers of myoblast differentiation and is important for the migration and cell shape changes that precede fusion. We have found that satellite cell-derived primary myoblasts from mice lacking the Barx2 homeobox gene show altered patterns of actin remodeling, reduced cell migration, and delayed differentiation. Consistent with the role of SMA in these processes, Barx2(-)(/)(-) myoblasts also show reduced expression of SMA mRNA and protein. The proximal SMA promoter contains binding sites for muscle regulatory factors and serum response factor as well as a conserved homeodomain binding site (HBS). We found that Barx2 binds to the HBS element and potentiates up-regulation of SMA promoter activity by MyoD. We also show that Barx2, MyoD, and serum response factor simultaneously occupy the SMA promoter in cells and that Barx2 interacts with MyoD. Overall these data indicate that Barx2 cooperates with other muscle-expressed transcription factors to regulate the early cytoskeletal remodeling events that underlie efficient myoblast differentiation.