Vascular calcification impairs vessel compliance and increases the risk of cardiovascular events. We found previously that liver X receptor agonists, which regulate intracellular cholesterol homeostasis, augment PKA agonist- or high phosphate-induced osteogenic differentiation of vascular smooth muscle cells. Because cholesterol is an integral component of the matrix vesicles that nucleate calcium mineral, we examined the role of cellular cholesterol metabolism in vascular cell mineralization. The results showed that vascular smooth muscle cells isolated from LDL receptor null (Ldlr(-/-)) mice, which have impaired cholesterol uptake, had lower levels of intracellular cholesterol and less osteogenic differentiation, as indicated by alkaline phosphatase activity and matrix mineralization, compared with WT cells. PKA activation with forskolin acutely induced genes that promote cholesterol uptake (LDL receptor) and biosynthesis (HMG-CoA reductase). In WT cells, inhibition of cholesterol uptake by lipoprotein-deficient serum attenuated forskolin-induced matrix mineralization, which was partially reversed by the addition of cell-permeable cholesterol. Prolonged activation of both uptake and biosynthesis pathways by cotreatment with a liver X receptor agonist further augmented forskolin-induced matrix mineralization. Inhibition of either cholesterol uptake, using Ldlr(-/-) cells, or of cholesterol biosynthesis, using mevastatin-treated WT cells, failed to inhibit matrix mineralization due to up-regulation of the respective compensatory pathway. Inhibition of both pathways simultaneously using mevastatin-treated Ldlr(-/-) cells did inhibit forskolin-induced matrix mineralization. Altogether, the results suggest that up-regulation of cholesterol metabolism is essential for matrix mineralization by vascular cells.