Transforming growth factor betas (TGF-betas) regulate key aspects of embryonic development and major human diseases. Although Smad2, Smad3, and extracellular signal-regulated kinase (ERK) mitogen-activated protein kinases (MAPKs) have been proposed as key mediators in TGF-beta signaling, their functional specificities and interactivity in controlling transcriptional programs in different cell types and (patho)physiological contexts are not known. We investigated expression profiles of genes controlled by TGF-beta in fibroblasts with ablations of Smad2, Smad3, and ERK MAPK. Our results suggest that Smad3 is the essential mediator of TGF-beta signaling and directly activates genes encoding regulators of transcription and signal transducers through Smad3/Smad4 DNA-binding motif repeats that are characteristic for immediate-early target genes of TGF-beta but absent in intermediate target genes. In contrast, Smad2 and ERK predominantly transmodulated regulation of both immediate-early and intermediate genes by TGF-beta/Smad3. These results suggest a previously uncharacterized hierarchical model of gene regulation by TGF-beta in which TGF-beta causes direct activation by Smad3 of cascades of regulators of transcription and signaling that are transmodulated by Smad2 and/or ERK.