Some of the most serious diseases involve altered size and structure of the arterial wall. Elucidating how arterial walls are built could aid understanding of these diseases, but little is known about how concentric layers of muscle cells and the outer adventitial layer are assembled and patterned around endothelial tubes. Using histochemical, clonal, and genetic analysis in mice, here we show that the pulmonary artery wall is constructed radially, from the inside out, by two separate but coordinated processes. One is sequential induction of successive cell layers from surrounding mesenchyme. The other is controlled invasion of outer layers by inner layer cells through developmentally regulated cell reorientation and radial migration. We propose that a radial signal gradient controls these processes and provide evidence that PDGF-B and at least one other signal contribute. Modulation of such radial signaling pathways may underlie vessel-specific differences and pathological changes in arterial wall size and structure.