Dicer is a RNAase III enzyme that cleaves double stranded RNA and generates small interfering RNA (siRNA) and microRNA (miRNA). The goal of this study is to examine the role of Dicer and miRNAs in vascular smooth muscle cells (VSMCs). We deleted Dicer in VSMCs of mice, which caused a developmental delay that manifested as early as embryonic day E12.5, leading to embryonic death between E14.5 and E15.5 due to extensive hemorrhage in the liver, brain, and skin. Dicer KO embryos showed dilated blood vessels and a disarray of vascular architecture between E14.5 and E15.5. VSMC proliferation was significantly inhibited in Dicer KOs. The expression of VSMC marker genes were significantly downregulated in Dicer cKO embryos. The vascular structure of the yolk sac and embryo in Dicer KOs was lost to an extent that no blood vessels could be identified after E15.5. Expression of most miRNAs examined was compromised in VSMCs of Dicer KO. Our results indicate that Dicer is required for vascular development and regulates vascular remodeling by modulating VSMC proliferation and differentiation.