Deregulated activation of the Src tyrosine kinase and heightened Id1 expression are independent mediators of aggressive tumor biology. The present report implicates Src signaling as a critical regulator of Id1 gene expression. Microarray analyses showed that Id family genes were among the most highly down-regulated by incubation of A549 lung carcinoma cells with the small-molecule Src inhibitor AZD0530. Id1 transcript and protein levels were potently reduced in a dose-dependent manner concomitantly with the reduction of activated Src levels. These effects were conserved across a panel of lung, breast, prostate, and colon cancer cell lines and confirmed by the ability of PP2, Src siRNA, and Src-blocking peptides to suppress Id1 expression. PP2, AZD0530, and dominant-negative Src abrogated Id1 promoter activity, which was induced by constitutively active Src. The Src-responsive region of the Id1 promoter was mapped to a region 1,199 to 1,360 bps upstream of the translation start site and contained a Smad-binding element. Src was also required for bone morphogenetic protein-2 (BMP-2)-induced Id1 expression and promoter activity, was moderately activated by BMP-2, and complexed with Smad1/5. Conversely, Src inhibitors blocked Smad1/5 nuclear translocation and binding to the Src-responsive region of the Id1 promoter. Consistent with a role for Src and Id1 in cancer cell invasion, Src inhibitors and Id1 siRNA decreased cancer cell invasion, which was increased by Id1 overexpression. Taken together, these results reveal that Src positively interacts with the BMP-Smad-Id pathway and provide new ways for targeted inhibition of Id1.