Members of the Smad family of TGFbeta signal transducers are important regulators of proliferation and cell fate during axis formation, organogenesis, and tumorigenesis. A canonical TGFbeta/Smad signaling pathway is conserved in nematodes, insects, and vertebrates. However, its evolutionary origin before the divergence of protostomes and deuterostomes is unclear. Here, we present the cloning and expression of a highly conserved orthologue of receptor-activated Smads in Hydra, which represents clear evidence of the presence of TGFbeta signaling in the ancient phylum Cnidaria. HySmad1 is expressed rather uniformly during asexual reproduction and regeneration, and is transcriptionally upregulated during oocyte development. This suggests that multiple functions of TGFbeta/Smad signaling might be conserved between diploblastic and triploblastic metazoans.