The mechanism(s) by which Smads mediate and modulate the transforming growth factor (TGF)-beta signal transduction pathway in fibrogenesis are not well characterized. We previously showed that Smad3 promotes alpha2(I) collagen gene (COL1A2) activation in human glomerular mesangial cells, potentially contributing to glomerulosclerosis. Here, we report that Sp1 binding is necessary for TGF-beta1-induced type I collagen mRNA expression. Deletion of three Sp1 sites (GC box) between -376 and -268 or mutation of a CAGA box at -268/-260 inhibited TGF-beta1-induced alpha2(I) collagen promoter activity. TGF-beta1 inducibility was also blocked by a Smad3 dominant negative mutant. Chemical inhibition of Sp1 binding with mithramycin A, or deletion of the GC boxes, inhibited COL1A2 activation by Smad3, suggesting cooperation between Smad3 and Sp1 in the TGF-beta1 response. Electrophoretic mobility shift assay showed that Sp1 and Smads form complexes with -283/-250 promoter sequences. Coimmunoprecipitation experiments demonstrate that endogenous Sp1, Smad3, and Smad4 form complexes in mesangial cells. In a Gal4-LUC reporter assay system, Sp1 stimulated the TGF-beta1-induced transcriptional activity of Gal4-Smad3, Gal4-Smad4 (266), or both. Using the transactivation domain B of Sp1 fused to the Gal4 DNA binding domain, we show that, in our system, the transcriptional activity of this Sp1 domain is not regulated by TGF-beta1, but it becomes responsive to this factor when Smad3 is coexpressed. Finally, combined Sp1 and Smad3 overexpression induces marked ligand-independent and ligand-dependent promoter activity of COL1A2. Thus, Sp1 and Smad proteins form complexes and their synergy plays an important role in mediating TGF-beta1-induced alpha2(I) collagen expression in human mesangial cells.