Vascular injury stimulates the cytokine-growth factor network in the vascular wall, including transforming growth factor-beta (TGF-beta). Reportedly, the intracellular signaling of TGF-beta is mediated by Smad proteins. We tested the effects of the ectopic expression of inhibitory Smads in cultured rat smooth muscle cells (SMC) to identify the role of TGF-beta/Smad signaling on the phenotypic modulation of SMC. The cells exposed to human recombinant TGF-beta1 (10 ng/ml) were stimulated Smad2 phosphorylation. Infection with the replication-deficient adenovirus vector expressing Smad7, but not bacterial beta-galactosidase or Smad6, was found to inhibit TGF-beta-induced Smad2 phosphorylation in a dose-dependent manner. TGF-beta suppressed the serum-induced proliferation of SMC from 36.3% to 51.0% (p<0.01), as measured by hand-counting, and this inhibition was attenuated by the ectopic expression of Smad7 (from 30.7% to 74.8% of the reduction of TGF-beta-response, p<0.05), but not Smad6. A BrdU incorporation assay also showed that TGF-beta-mediated growth inhibition was attenuated by exogenous Smad7 and that this inhibition can be reversed by an additional expression of exogenous Smad2. TGF-beta increased the expression of alpha-smooth muscle actin and myosin heavy chain by 1.3-fold and 1.6-fold in comparison to the control, respectively, and these increases were attenuated by exogenous Smad7, but not Smad6. Our data indicate that Smads mediate TGF-beta responses on SMC phenotypes. Smad7, but not Smad6, may specifically act as an inhibitor of TGF-beta responses.