Smad3 is a key signal transducer of transforming growth factor-ss (TGF-ss) and activin, and is known to be a DNA-binding transcriptional regulator. Here we report a novel property of Smad3 in regulating the proteasomal degradation of the human enhancer of filamentation 1 (HEF1), which is a member of the Cas family of cytoplasmic docking proteins. Our studies revealed that Smad3 interacts with HEF1 and triggers the proteasomal degradation of HEF1 in overexpression systems. In addition, TGF-ss stimulation induces rapid proteasomal degradation of endogenous HEF1 in different TGF-ss-responsive cell lines. Interestingly, the degradation of HEF1 protein in epithelial cells is followed closely by an increase in HEF1 mRNA, resulting in a time-dependent increase in HEF1 protein level in TGF-ss-treated cells. Furthermore, we observed that an elevated HEF1 protein level inhibits TGF-ss-induced Smad3-mediated gene responses. These data provide the first evidence for a novel cytoplasmic activity of Smad3 in regulating proteasomal degradation of HEF1 and also suggest a role for HEF1 in a negative feedback mechanism of the TGF-ss signaling pathway.