The Smads are the signaling mediators of the TGFbeta superfamily. In the present study, we examined Smad expression in mouse epidermis and chemically-induced skin tumors. Mutations in Smad2 and -4 genes were also screened. Transcripts of Smad1 through -5 were constantly expressed in the epidermis regardless of changes in TGFbeta signaling, state of differentiation and stages of carcinogenesis. Smad7 transcripts were barely detectable in keratinocytes, but were induced by TGFbeta1 treatment and in chemically-induced skin tumors. At the protein level, Smad1 was detected throughout the epidermis, whereas Smad2 through -5 exhibited greater levels in suprabasal layers than basal keratinocytes. In cultured keratinocytes, Smad2, -3 and -4 underwent nuclear translocation upon TGFbeta1 treatment. Furthermore, nuclear translocation of Smads correlated with decreased BrdU labeling in proliferative keratinocytes. Although no mutations were detected in the Smad2 and -4 genes in tumors, proteins of Smad1 through -5 were partially or completely lost in carcinomas. These data document that Smads are expressed at high levels in the epidermis and mediate signaling of the TGFbeta superfamily. During skin carcinogenesis, loss of Smad1 through -5 and overexpression of Smad7 may contribute to the loss of growth inhibition mediated by TGFbeta superfamily members, thus resulting in tumor progression.