Atherosclerosis causes most acute coronary syndromes and strokes. The pathogenesis of atherosclerosis includes recruitment of inflammatory cells to the vessel wall and activation of vascular cells. CD44 is an adhesion protein expressed on inflammatory and vascular cells. CD44 supports the adhesion of activated lymphocytes to endothelium and smooth muscle cells. Furthermore, ligation of CD44 induces activation of both inflammatory and vascular cells. To assess the potential contribution of CD44 to atherosclerosis, we bred CD44-null mice to atherosclerosis-prone apoE-deficient mice. We found a 50-70% reduction in aortic lesions in CD44-null mice compared with CD44 heterozygote and wild-type littermates. We demonstrate that CD44 promotes the recruitment of macrophages to atherosclerotic lesions. Furthermore, we show that CD44 is required for phenotypic dedifferentiation of medial smooth muscle cells to the "synthetic" state as measured by expression of VCAM-1. Finally, we demonstrate that hyaluronan, the principal ligand for CD44, is upregulated in atherosclerotic lesions of apoE-deficient mice and that the low-molecular-weight proinflammatory forms of hyaluronan stimulate VCAM-1 expression and proliferation of cultured primary aortic smooth muscle cells, whereas high-molecular-weight forms of hyaluronan inhibit smooth muscle cell proliferation. We conclude that CD44 plays a critical role in the progression of atherosclerosis through multiple mechanisms.