Cleidocranial dysplasia (CCD), an autosomal-dominant human bone disease, is thought to be caused by heterozygous mutations in runt-related gene 2 (RUNX2)/polyomavirus enhancer binding protein 2alphaA (PEBP2alphaA)/core-binding factor A1 (CBFA1). To understand the mechanism underlying the pathogenesis of CCD, we studied a novel mutant of RUNX2, CCDalphaA376, originally identified in a CCD patient. The nonsense mutation, which resulted in a truncated RUNX2 protein, severely impaired RUNX2 transactivation activity. We show that signal transducers of transforming growth factor beta superfamily receptors, Smads, interact with RUNX2 in vivo and in vitro and enhance the transactivation ability of this factor. The truncated RUNX2 protein failed to interact with and respond to Smads and was unable to induce the osteoblast-like phenotype in C2C12 myoblasts on stimulation by bone morphogenetic protein. Therefore, the pathogenesis of CCD may be related to the impaired Smad signaling of transforming growth factor beta/bone morphogenetic protein pathways that target the activity of RUNX2 during bone formation.