Mdm2 overexpression confers a growth promoting activity upon cells primarily by downregulating the p53 tumor suppressor protein. Nevertheless, Mdm2 deregulation has also been implicated in inhibiting TGF-beta growth repression in a p53 independent manner. Our goal in this study was to examine whether overexpression of Mdm2 or MdmX, a Mdm2-related protein, could affect Smad-induced transactivation. As downstream signaling elements of the TGF-beta pathway, Smads represent one potential target for Mdm2 and MdmX. Here we show that MdmX but not Mdm2 is capable of inhibiting Smad induced transactivation. Based on deletion mutant analysis, MdmX inhibition of Smad transactivation was independent of the p53 and Mdm2 interaction domains, yet required amino acid residues 128-444. Using TGF-beta sensitive HepG2 cells, MdmX overexpression was shown to inhibit TGF-beta induced Smad transactivation. Additionally, mouse embryo fibroblasts (MEFs) lacking p53 and MdmX showed enhanced Smad transactivation when compared to MEFs lacking either p53 or p53 and Mdm2. Interestingly, the inhibition of Smad transactivation by MdmX could be reversed by p300, a functional co-activator of Smads and a necessary factor for Mdm2 nuclear export and did not result from altered Smad localization. In vitro studies demonstrate that MdmX binds to p300 as well as Smad3 and Smad4. Taken together, these results suggest that inhibition of Smad-induced transactivation by MdmX occurs by altering Smad interaction with its coactivator p300.