The members of the Smad protein family are intracellular mediators of transforming growth factor beta (TGF-beta) signaling. Smad1 transduces bone morphogenetic protein signals, inducing formation of ventral mesoderm in Xenopus embryos, whereas Smad2 transduces activin/TGF-beta signals, generating dorsal mesoderm. Calmodulin directly binds to many Smads and was shown to down-regulate Smad2 activity in a cell culture system (Zimmerman, C. M., Kariapper, M. S. T., and Mathews, L. S. (1997) J. Biol. Chem. 273, 677-680). Here, we extend those data and demonstrate that calmodulin alters Smad signaling in living embryos, increasing Smad1 activity while inhibiting Smad2 function. To characterize this regulation, we undertook a structure-function analysis and found that calmodulin binds to two distinct and conserved regions in both Smad1 and Smad2. Receptor tyrosine kinase signaling also modifies Smad activity (Kretzschmar, M., Doody, J., and Massagué, J. (1997) Nature 389, 618-622; Kretzschmar, M., Doody, J., Timokhina, I., and Massagué, J. (1999) Genes Dev. 13, 804-816; de Caestecker, M. P., Parks, W. T., Frank, C. J., Castagnino, P., Bottaro, D. P., Roberts, A. B., and Lechleider, R. J. (1998) Genes Dev. 12, 1587-1592). We show that calmodulin binding to Smads inhibits subsequent Erk2-dependent phosphorylation of Smads and vice versa. These observations suggest the presence of a cross-talk between three major signaling cascades as follows: Ca(2+)/calmodulin, receptor tyrosine kinase, and TGF-beta pathways.