A number of pathogenic and proinflammatory stimuli, and the transforming growth factor-beta (TGF-beta) exert opposing activities in cellular and immune responses. Here we show that the RelA subunit of nuclear factor kappaB (NF-kappaB/RelA) is necessary for the inhibition of TGF-beta-induced phosphorylation, nuclear translocation, and DNA binding of SMAD signaling complexes by tumor necrosis factor-alpha (TNF-alpha). The antagonism is mediated through up-regulation of Smad7 synthesis and induction of stable associations between ligand-activated TGF-beta receptors and inhibitory Smad7. Down-regulation of endogenous Smad7 by expression of antisense mRNA releases TGF-beta/SMAD-induced transcriptional responses from suppression by cytokine-activated NF-kappaB/RelA. Following stimulation with bacterial lipopolysaccharide (LPS), or the proinflammatory cytokines TNF-alpha and interleukin-1beta (IL-1beta, NF-kappaB/RelA induces Smad7 synthesis through activation of Smad7 gene transcription. These results suggest a mechanism of suppression of TGF-beta/SMAD signaling by opposing stimuli mediated through the activation of inhibitory Smad7 by NF-kappaB/RelA.