Rationale: Fibroblast-specific protein 1 (FSP-1) plays multiple roles in promoting cell proliferation and motility. Increased FSP-1 expression in smooth muscle cells (SMCs) has been associated with their enhanced proliferation. Objective: To study how FSP-1 contributes to neointima formation of vein grafts. Methods: Arteriovenous grafts were created in wild-type or FSP-1-GFP mice (green fluorescent protein expression regulated by FSP-1 promoter). The effects of FSP-1 on bone marrow (BM) cell migration and on SMC proliferation were studied in vivo and in vitro. Results: On creation of a vein graft, there was rapid deposition of platelets on the denuded surface leading to secretion of the chemokine stromal cell-derived factor-1 alpha (SDF-1 alpha). This was followed by recruitment of BM-derived cells expressing the SDF-1 alpha receptor CXCR4; homing of FSP-1-positive cells was found to be dependent on platelet-derived SDF-1 alpha. FSP-1 was expressed in 8% of the BM cells, and 20% of these express CD45; 85% of FSP-1-positive cells express CD11b. We found that the FSP-1-positive cells migrated into the vein graft in a Rac-1-dependent fashion. FSP-1 expression was also found to stimulate proliferation of SMCs through a MEK5-ERK5 signaling pathway that can be suppressed by a dominant-negative Rac1. Consequently, knocking down FSP-1 expression in BM cells prevented neointimal formation. Conclusions: BM-derived FSP-1(+) cells enhance neointima formation through an increase in transendothelial invasion with stimulation of SMC proliferation. The Rac1 and ERK5 signaling cascade mediate FSP-1-induced responses in SMCs and BM cells. This novel pathophysiology suggests a new therapeutic target, FSP-1, for preventing the development of neointima in vein grafts. (Circ Res. 2012;110:230-240.)