The Smad proteins are key intracellular effectors of transforming growth factor-beta (TGF-beta) cytokines. The ability of Smads to modulate transcription results from a functional cooperativity with the coactivators p300/cAMP-response element-binding protein-binding protein (CBP), or the corepressors TGIF and Ski. The c-Jun N-terminal kinase (JNK) pathway, another downstream target activated by TGF-beta receptors, has also been suggested to inhibit TGF-beta signaling through interaction of c-Jun with Smad2 and Smad3. Here we show that c-Jun directly interacts with Ski to enhance the association of Ski with Smad2 in the basal state. Interestingly, TGF-beta signaling induces dissociation of c-Jun from Ski, thereby relieving active repression by c-Jun. Moreover, activation of JNK pathway suppressed the ability of TGF-beta to induce dissociation of c-Jun from ski. Thus, the formation of a c-Jun/Ski complex maintains the repressed state of Smad2-responsive genes in the absence of ligand and participates in negative feedback regulation of TGF-beta signaling by the JNK cascade.