As a member of the TGF-beta superfamily, myostatin is a specific negative regulator of skeletal muscle mass. To identify the downstream components in the myostatin signal transduction pathway, we used a luciferase reporter assay to elucidate myostatin-induced activity. The myostatin-induced transcription requires the participation of regulatory Smads (Smad2/3) and Co-Smads (Smad4). Conversely, inhibitory Smad7, but not Smad6, dramatically reduces the myostatin-induced transcription. This Smad7 inhibition is enhanced by co-expression of Smurf1. We have also shown that Smad7 expression is stimulated by myostatin via the interaction between Smad2, Smad3, Smad4 and the SBE (Smad binding element) in the Smad7 promoter. These results suggest that the myostatin signal transduction pathway is regulated by Smad7 through a negative feedback mechanism.