Smad proteins mediate transforming growth factor beta signaling from the cell membrane to the nucleus. Upon phosphorylation by the activated receptor kinases, the receptor-regulated Smad, such as Smad2, forms a heterocomplex with the co-mediator Smad, Smad4. This heterocomplex is then translocated into the nucleus, where it associates with other transcription factors and regulates expression of ligand-responsive genes. The stoichiometry between receptor-regulated Smad and co-mediator Smad is important for understanding the molecular mechanisms of the signaling process. Using purified recombinant proteins, we demonstrate that Smad2 and Smad4 form a stable heterodimer and that the Smad4 activation domain is important for the formation of this complex. Many tumor-derived missense mutations disrupt the formation of this heterocomplex in in vitro interaction assays. Mapping these mutations onto the structures of Smad4 and Smad2 identifies a symmetric interface between these two Smad proteins. Importantly, two previous models on the formation of a heterocomplex are incompatible with our observations and other reported evidence.