Transforming growth factor-beta (TGF-beta) is a potent inhibitor of pancreatic acinar cell growth. Smad4 is a central mediator in the TGF-beta signaling pathway. To study the effect of Smad4 on pancreatic growth, cell cycle protein expression, and the expression of a TGF-beta-responsive promoter in vitro, we constructed an adenovirus containing dominant-negative COOH terminal truncated Smad4 (AddnSmad4) downstream of the rat elastase promoter. Acinar cells expressed dominant-negative Smad4 within 8 h after infection, and expression persisted for 72 h. Mouse pancreatic acini were infected with either AddnSmad4 or control adenovirus expressing green fluorescent protein, and TGF-beta was added 8 h after infection. Acinar cells were then incubated for 1, 2, or 3 days, and [(3)H]thymidine incorporation was determined. AddnSmad4 significantly reduced TGF-beta inhibition of [(3)H]thymidine incorporation, with maximal effects on day 3. AddnSmad4 also completely blocked TGF-beta-mediated growth inhibition in the presence of basic fibroblast growth factor. We next examined the effects of AddnSmad4 on TGF-beta-induced expression of the cell cycle regulatory proteins p21(Cip1) and p27(Kip1). TGF-beta induced upregulation of p21(Cip1), which was completely blocked by AddnSmad4. AddnSmad4 also inhibited TGF-beta-induced expression of the TGF-beta-responsive luciferase reporter 3TP-Lux. These results show that Smad4 is essential in TGF-beta-mediated signaling in pancreatic acinar cells.