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Restenosis after angioplasty is caused usually by neointima formation characterized by aberrant vascular smooth muscle cell (VSMC) dedifferentiation. Myeloid-derived growth factor (MYDGF), secreted from bone marrow-derived monocytes and macrophages, has been found to have cardioprotective effects. In this study we investigated the effect of MYDGF to postinjury neointimal formation and the underlying mechanisms. Rat carotid arteries balloon-injured model was established. We found that plasma MYDGF content and the level of MYDGF in injured arteries were significantly decreased after balloon injury. Local application of exogenous MYDGF (50 μg/mL) around the injured vessel during balloon injury markedly ameliorated the development of neointimal formation evidenced by relieving the narrow endovascular diameter, improving hemodynamics, and reducing collagen deposition. In addition, local application of MYDGF inhibited VSMC dedifferentiation, which was proved by reversing the elevated levels of osteopontin (OPN) protein and decreased levels of α-smooth muscle actin (α-SMA) in the left carotid arteries. We showed that PDGF-BB (30 ng/mL) stimulated VSMC proliferation, migration and dedifferentiation in vitro; pretreatment with MYDGF (50−200 ng/mL) concentration-dependently eliminated PDGF-BB-induced cell proliferation, migration and dedifferentiation. Molecular docking revealed that MYDGF had the potential to bind with sphingosine-1-phosphate receptor 2 (S1PR2), which was confirmed by SPR assay and Co-IP analysis. Pretreatment with CCG-1423 (Rho signaling inhibitor), JTE-013 (S1PR2 antagonist) or Ripasudil (ROCK inhibitor) circumvented the inhibitory effects of MYDGF on VSMC phenotypic switching through inhibiting S1PR2 or its downstream RhoA-actin monomers (G-actin) /actin filaments (F-actin)-MRTF-A signaling. In summary, this study proves that MYDGF relieves neointimal formation of carotid arteries in response to balloon injury in rats, and suppresses VSMC dedifferentiation induced by PDGF-BB via S1PR2-RhoA-G/F-actin-MRTF-A signaling pathway. In addition, our results provide evidence for cross talk between bone marrow and vasculature.