Vasodilatory shock in sepsis is caused by the failure of the vasculature to respond to vasopressors, which results in hypotension, multiorgan failure, and ultimately patient death. Recently, it was reported that CPI-17, a key player in the regulation of smooth muscle contraction, was downregulated by lipopolysaccharide (LPS) in mesenteric arteries concordant with vascular hypocontractilty. While Sp1 has been shown to activate CPI-17 transcription, it is unknown whether Sp1 is involved in LPS-induced smooth muscle CPI-17 downregulation. Here we report that tumor necrosis factor (TNF) was critical for LPS-induced smooth muscle CPI-17 downregulation. Mechanistically, we identified two GC boxes as a key TNF response element in the CPI-17 promoter and demonstrated that KLF4 was upregulated by TNF, competed with Sp1 for the binding to the GC boxes in the CPI-17 promoter, and repressed CPI-17 transcription through histone deacetylases (HDACs). Moreover, genetic deletion of TNF or pharmacological inhibition of HDACs protected mice from LPS-induced smooth muscle CPI-17 downregulation, vascular hypocontractility, hypotension, and mortality. In summary, these data provide a novel mechanism of the transcriptional control of CPI-17 in vascular smooth muscle cells under inflammatory conditions and suggest a new potential therapeutic strategy for the treatment of vasodilatory shock in sepsis.