Abstract Introduction Smooth muscle cells (SMC) play a critical role in atherosclerosis. The Aryl hydrocarbon receptor (AHR) is an environment-sensing transcription factor that contributes to vascular development, and has been implicated in coronary artery disease (CAD) risk. We hypothesized that AHR can affect atherosclerosis by regulating phenotypic modulation of SMC. Methods We combined RNA-Seq, ChIP-Seq, ATAC-Seq and in-vitro assays in human coronary artery SMC (HCASMC), with single-cell RNA-Seq (scRNA-Seq), histology, and RNAscope in an SMC-specific lineage-tracing Ahr knockout mouse model of atherosclerosis to better understand the role of AHR in vascular disease. Results Genomic studies coupled with functional assays in cultured HCASMC revealed that AHR modulates HCASMC phenotype and suppresses ossification in these cells. Lineage tracing and activity tracing studies in the mouse aortic sinus showed that the Ahr pathway is active in modulated SMC in the atherosclerotic lesion cap. Furthermore, scRNA-Seq studies of the SMC-specific Ahr knockout mice showed a significant increase in the proportion of modulated SMC expressing chondrocyte markers such as Col2a1 and Alpl , which localized to the lesion neointima. These cells, which we term “chondromyocytes” (CMC), were also identified in the neointima of human coronary arteries. In histological analyses, these changes manifested as larger lesion size, increased lineage-traced SMC participation in the lesion, decreased lineage-traced SMC in the lesion cap, and increased alkaline phosphatase activity in lesions in the Ahr knockout compared to wild-type mice. We propose that AHR is likely protective based on these data and inference from human genetic analyses. Conclusion Overall, we conclude that AHR promotes maintenance of lesion cap integrity and diminishes the disease related SMC-to-CMC transition in atherosclerotic tissues.