Bone morphogenetic proteins, including growth/differentiation factor-5 (GDF-5), are multifunctional cytokines. Recent studies of intracellular signal transduction mechanisms for the transforming growth factor-beta superfamily have focused on Smad proteins. However, scant attention has been given to the mechanism by which GDF-5 exerts its negative growth effect on immunological competent cells. In the present study, we demonstrated that GDF-5 induced cell cycle arrest in the G1 phase before the appearance of apoptosis in mouse B cell hybridoma HS-72 cells, while the ectopic expression of Smad6 and Smad7 in HS-72 cells suppressed the GDF-5-induced G1 cell cycle arrest by abolishing the expression of p21(CIP-1/WAF-1) and hypophosphorylation of retinoblastoma protein. Moreover, we found that Smad6 and Smad7 suppressed GDF-5-induced apoptosis in HS-72 cells. These findings indicated that Smad6 and Smad7 exhibit inhibitory effects toward GDF-5-mediated signaling in B lineage cells.