Rapid regeneration of smooth muscle after vascular injury is essential for maintaining arterial function. The existence and putative roles of resident vascular stem cells (VSCs) in artery repair are controversial, and vessel regeneration is thought to be mediated by proliferative expansion of pre-existing smooth muscle cells (SMCs). Here, we performed cell fate mapping and single-cell RNA sequencing to identify Sca1 VSCs in the adventitial layer of artery walls. After severe injury, Sca1 VSCs migrate into the medial layer and generate de novo SMCs, which subsequently expand more efficiently compared with pre-existing smooth muscle. Genetic lineage tracing using dual recombinases distinguished a Sca1PDGFRa VSC subpopulation that generates SMCs, and genetic ablation of Sca1 VSCs or specific knockout of Yap1 in Sca1 VSCs significantly impaired artery repair. These findings provide genetic evidence of a bona fide Sca1 VSC population that produces SMCs and delineates their critical role in vessel repair.