c-Ski is a proto-oncogene product that induces morphologic transformation, anchorage independence, and myogenic differentiation when it is over-expressed in mesenchymal cells. c-Ski also inhibits signaling of transforming growth factor-beta (TGF-beta) superfamily members through interaction with Smad proteins. Although c-Ski is predominantly localized in the nucleus, aberrant cytoplasmic localization of it has also been reported in some tumor tissues and cell lines. In the present study, we identified the nuclear localization signal (NLS) in c-Ski. By introducing a mutation to abolish NLS activity, we examined the function of cytoplasmic c-Ski. Although cytoplasmic c-Ski suppressed TGF-beta superfamily-induced Smad signaling through sequestration of activated Smad complex to the cytoplasm, it failed to exhibit some of the activities that require nuclear localization of c-Ski, including suppression of basal transcription of the Smad7 gene. These findings indicate that subcellular localization of c-Ski affects its biologic activities. We also found that c-Ski accumulated in the cytoplasm when proteasome activity was inhibited. Mapping of the regions required for cytoplasmic accumulation by proteasome inhibitors suggests that subcellular localization of c-Ski may be regulated by proteasome-sensitive processes through amino acid residues 94-210 and 491-548.