Administration of bleomycin (BM) produces inflammation and fibrosis of the lung in humans and experimental animals. The molecular defects by which BM induces these pathological effects have not been studied in detail. We studied the expression of Smad family proteins, key molecules involved in mediating transforming growth factor (TGF)-beta signaling from the cell membrane to the nucleus, during the early and late phases of BM-induced fibrogenesis. Pulmonary fibrosis was induced in male Sprague-Dawley rats by a single intratracheal injection (1.5 units) of BM. Control rats received saline. Rats were killed at 3, 5, 7, 14, and 28 days after BM, cytosolic and nuclear proteins were extracted and isolated from lung tissues, and Smad proteins were probed with specific antibodies. In BM-exposed lung tissue, compared with control, Smad3 decreased persistently in the cytosol and increased transiently in the nucleus. There was a persistent increase in phosphorylation and nuclear accumulation of Smad2/3. Smad4 was increased transiently in both the cytosol and nucleus. A significant and progressive decrease in the expression of Smad7, the endogenous inhibitor of TGF-beta/Smad signaling, was observed after BM instillation. Collectively, our results indicate that an imbalance between agonistic Smads2-4 and antagonistic Smad7 may result in the unchecked activation of an autocrine TGF-beta loop, which contributes to the pathogenesis of BM-induced pulmonary fibrosis.