We studied the smooth muscle cell differentiation capability of human placental multipotent mesenchymal stromal cells (hPMSCs) and identified how endothelial cells recruit hPMSCs participating in vessel formation. hPMSCs from term placentas were induced to differentiate into smooth muscle cells under induction conditions and different matrix substrates. We assessed endothelial cells from umbilical veins for platelet-derived growth factor (PDGF)-BB expression and to induce hPMSC PDGFR-beta and STAT3 activation. Endothelial cells were co-cultured with hPMSCs for in vitro angiogenesis. Cell differentiation ability was then further assessed by mouse placenta transplantation assay. hPMSCs can differentiate into smooth muscle cells; collagen type I and IV or laminin support this differentiation. Endothelial cells expressed significant levels of PDGF-BB and activated STAT3 transcriptional activity in hPMSCs. Endothelial cell-conditioned medium induced hPMSC migration, which was inhibited by STAT3 small interfering RNA transfection or by pretreatement with PDGFR-beta-blocking antibody but not by PDGFR-alpha-blocking antibody or isotype immunoglobulin G (IgG; P < 0.001). hPMSCs can incorporate into endothelial cells with tube formation and promote endothelial cells, forming capillary-like networks than endothelial cells alone (tube lengths: 12 024.1 ± 960.1 vs. 9404.2 ± 584.7 pixels; P < 0.001). Capillary-like networks were significantly reduced by hPMSCs pretreated with PDGFR-beta-blocking antibody but not by PDGFR-alpha-blocking antibody or isotype IgG (P < 0.001). Transplantation of hPMSCs into mouse placentas revealed incorporation of the hPMSCs into vessel walls, which expressed alpha-smooth muscle actin, calponin, and smooth muscle myosin (heavy chain) in vivo. In conclusion, endothelial cell-hPMSC interactions occur during vessel development of placenta. Placental endothelial cell-derived PDGF-BB recruits hPMSCs involved in vascular development via PDGFR-beta/STAT3 activation.