Low oxygen tension (hypoxia) has been implicated in proliferation of vascular smooth muscle cells (SMCs) of the lung. Tissue hypoxia also occurs in the obstructed bladder. The extracellular-regulated kinase mitogen-activated protein kinase 1/2 (Erk1/2) pathway is induced in many cell types during hypoxia. We examined whether hypoxia (3% O2), compared with normoxia (21% O2), induces proliferation responses and activation of the Erk1/2 pathways in primary rat bladder smooth muscle cells (BSMCs). We show that hypoxia induces proliferation of BSMCs at 18 h and, although reduced at 22 h, still remained above normoxic levels. Hypoxia induced a strikingly transient activation of Erk1/2 that lasted only 10–30 min. However, inhibition of the transient Erk1/2 activity with a specific mitogen-activated protein kinase kinase 1 (MEK-1) inhibitor PD 98059 prevented subsequent hypoxia-induced proliferation at 18 h. Interestingly, inhibition of general matrix metalloproteinase (MMP) activity, using either doxycycline or GM 6001, prevented both transient Erk1/2 activity and subsequent proliferation in response to hypoxia. Furthermore, MMP-7 (matrilysin) is activated in the conditioned medium (CM) of BSMCs at 10–20 min of hypoxia. In addition, MMP-7 was also transcriptionally induced at 6 h of hypoxia in an Erk1/2-dependent manner. Moreover, transient Erk1/2 activation and BSMC proliferation were both dependent on epidermal growth factor receptor (EGFR/HER1) but not neu receptor (HER2/ERB2) autophosphorylation. We conclude that hypoxia leads to Erk1/2 activation, which appears to modulate BSMC proliferation through MMP-7-and EGFR-mediated mechanisms.