Pentoxifylline (PTX) is a potent inhibitor of connective tissue growth factor (CTGF), but its underlying mechanism is poorly understood. Here, it was demonstrated that PTX inhibited not only TGF-beta1-induced CTGF expression but also CTGF-induced collagen I (alpha1) [Col I (alpha1)] expression in normal rat kidney fibroblasts (NRK-49F) and alpha-smooth muscle actin expression in normal rat kidney proximal tubular epithelial cells (NRK-52E). Furthermore, PTX attenuated tubulointerstitial fibrosis, myofibroblasts accumulation, and expression of CTGF and Col I (alpha1) in unilateral ureteral obstruction kidneys. The mechanism by which PTX reduced CTGF in NRK-49F and NRK-52E was investigated. Activation of Smad3/4 was essential for TGF-beta1-induced CTGF transcription, but PTX did not interfere with TGF-beta1 signaling to Smad2/3 activation and association with Smad4 and their nuclear translocation. However, PTX was capable of blocking activation of TGF-beta1-induced Smad3/4-dependent reporter as well as CTGF promoter, suggesting that PTX affects a factor that acts cooperatively with Smad3/4 to execute transcriptional activation. It was found that PTX increased intracellular cAMP and caused cAMP response element binding protein phosphorylation. The protein kinase A antagonist H89 abolished the inhibitory effect of PTX on Smad3/4-dependent CTGF transcription, whereas dibutyryl cAMP and forskolin recapitulated the inhibitory effect. In conclusion, these results indicate that PTX inhibits CTGF expression by interfering with Smad3/4-dependent CTGF transcription through protein kinase A and blocks the profibrogenic effects of CTGF on renal cells. Because of the dual blockade, PTX potently attenuates the tubulointerstitial fibrosis in unilateral ureteral obstruction kidneys.