Transforming growth factor beta (TGF-beta) is the most potent profibrogenic mediator in liver fibrosis. Although Smad proteins have been identified as intracellular mediators in the TGF-beta signaling pathway, the function of individual Smad proteins remains poorly understood. The aim of this study was to explore the contribution of Smad3 in mediating TGF-beta responses in a model of acute liver injury in vivo and in culture-activated hepatic stellate cells (HSCs). Wild-type, Smad3 heterozygous or Smad3 homozygous knockout mice were treated with a single intragastric administration of CCl(4). After 72 hours, the induction of hepatic collagen alpha1(I) and alpha2(I) messenger RNA (mRNA) levels in Smad3 knockout mice was only 42% and 64%, respectively, of the levels induced in wild-type mice. However, smooth muscle alpha-actin (alpha-SMA) was expressed at a slightly higher level in livers from knockout mice compared with wild-type mice. In culture-activated HSCs from Smad3 knockout mice, collagen alpha1(I) mRNA was 73% of wild-type HSCs, but alpha-SMA expression was the same. HSCs from knockout mice showed a higher proliferation rate than wild-type HSCs. Smad3-deficient HSCs did not form TGF-beta1-induced Smad-containing DNA-binding complexes. In conclusion, (1) maximal expression of collagen type I in activated HSCs requires Smad3 in vivo and in culture; (2) Smad3 is not necessary for HSC activation as assessed by alpha-SMA expression; (3) Smad3 is necessary for inhibition of proliferation of HSCs, which might be TGF-beta-dependent; and (4) Smad3 is required for TGF-beta1-mediated Smad-containing DNA-binding complex formation in cultured HSCs.