We reconstituted a three-dimensional gastric carcinoma model similar to invasive gastric carcinoma tissue. This model consists of a human gastric carcinoma cell line, GCTM-1, a human fibroblast cell line, TIG-1-20, and transforming growth factor-beta (TGF-beta)-containing type I collagen gel. Using this model, we were able to observe the growth of the two cell types, especially carcinoma cell invasive growth, in real time for more than 30 days. TGF-beta and TIG-1-20 were essential for GCTM-1 invasive growth and proliferation, respectively. TGF-beta induced the enhanced expression of matrix metalloproteinase 9 (MMP9) and urokinase-type plasminogen activator (uPA) in GCTM-1 at both the protein and enzymatic activity levels. The TGF-beta-induced invasion of GCTM-1 was inhibited by MMP9- or uPA-antisense (AS) oligonucleotide transfection to GCTM-1. When exogenous interferon-gamma (IFN-gamma) was added to this model, TGF-beta-dependent GCTM-1 invasion was significantly inhibited, concomitant with the decreased expression of MMP9 and uPA. The intracellular signal transduction of Smad was examined to analyse the mechanism of the inhibitory effect of IFN-gamma. TGF-beta accelerated the phosphorylation of Smad2/3 and nuclear translocation of the Smad2/3-Smad4 complex in GCTM-1, but these TGF-beta-induced effects were significantly inhibited by IFN-gamma-induced Smad7 expression. When GCTM-1 was cotransfected with AS oligonucleotide of Smad2 and Smad3, the TGF-beta-induced invasion of GCTM-1 disappeared. In addition, the inhibitory effect of IFN-gamma on TGF-beta-dependent GCTM-1 invasion vanished by the AS oligonucleotide of Smad7 transfection. These results indicate that IFN-gamma inhibits TGF-beta-dependent GCTM-1 invasion through cross-talk in the Smad pathway. IFN-gamma may be a new therapeutic tool for TGF-beta-expressed invasive carcinomas.