The gastrointestinal tract is enveloped by concentric and orthogonally aligned layers of smooth muscle; however, an understanding of the mechanisms by which these muscles become patterned and aligned in the embryo has been lacking. We find that Hedgehog acts through Bmp to delineate the position of the circumferentially oriented inner muscle layer, whereas localized Bmp inhibition is critical for allowing formation of the later-forming, longitudinally oriented outer layer. Because the layers form at different developmental stages, the muscle cells are exposed to unique mechanical stimuli that direct their alignments. Differential growth within the early gut tube generates residual strains that orient the first layer circumferentially, and when formed, the spontaneous contractions of this layer align the second layer longitudinally. Our data link morphogen-based patterning to mechanically controlled smooth muscle cell alignment and provide a mechanistic context for potentially understanding smooth muscle organization in a wide variety of tubular organs.