Smad7 has been identified as a negative regulator of transforming growth factor beta (TGF-beta) signaling by interfering with the phosphorylation of other Smad proteins by TGF-beta receptor type I (TbetaRI). We established a mink lung epithelial (Mv1Lu) cell line where ectopic expression of Smad7 is tightly controlled by doxycycline using an improved Tet-on system. Once induced by doxycycline, the recombinant Smad7 was localized predominantly in the perinuclear region and in the cytoplasm. However, the type of culture surface alters the subcellular localization of Smad7: on plastic or on fibronectin-coated glass, Smad7 was localized in the cytoplasm; but when the cells were cultured on glass, nuclear localization was observed. TGF-beta stimulation did not alter substantially the cellular distribution of Smad7. Importantly, the expression of recombinant Smad7 differentially inhibited TGF-beta signaling pathways. Consistent with previous studies, Smad7 inhibited TGF-beta-stimulated induction of type 1 plasminogen activator inhibitor as measured by p3TP-Lux reporter. However, expression of Smad7 had little effect on TGF-beta-induced growth inhibition.