Smad proteins are critical signal transducers downstream of the receptors o
f the transforming growth factor-beta (TGF beta) superfamily. On phosphoryl
ation and activation by the active TGF beta receptor complex, Smad2 and Sma
d3 form hetero-oligomers with Smad4 and translocate into the nucleus, where
they interact with different cellular partners, bind to DNA, regulate tran
scription of various downstream response genes, and cross-talk with other s
ignaling pathways. Here we show that a nuclear oncoprotein, Ski, can intera
ct directly with Smad2, Smad3, and Smad4 on a TGF beta-responsive promoter
element and repress their abilities to activate transcription through recru
itment of the nuclear transcriptional corepressor N-CoR and possibly its as
sociated histone deacetylase complex. Overexpression of Ski in a TGF beta-r
esponsive cell Line renders it resistant to TGF beta-induced growth inhibit
ion and defective in activation of JunB expression. This ability to overcom
e TGF beta-induced growth arrest may be responsible for the transforming ac
tivity of Ski in human and avian canter cells. Our studies suggest a new pa
radigm for inactivation of the Smad proteins by an oncoprotein through tran
scriptional repression.