The inhibitory Smads, Smad6 and Smad7, play pivotal roles in negative regulation of transforming growth factor-beta (TGF-beta) family signaling as feedback molecules as well as mediators of cross-talk with other signaling pathways. Whereas Smad7 acts as a ubiquitous inhibitor of Smad signaling, Smad6 has been shown to effectively inhibit bone morphogenetic protein (BMP) signaling but only weakly TGF-beta/activin signaling. In the present study, we have found that Smad6 inhibits signaling from the activin receptor-like kinase (ALK)-3/6 subgroup in preference to that from the ALK-1/2 subgroup of BMP type I receptors. The difference is attributable to the interaction of Smad6 with these BMP type I receptors. The amino acid residues responsible for Smad6 sensitivity of ALK-3 were identified as Arg-238, Phe-264, Thr-265, and Ala-269, which map to the N-terminal lobe of the ALK-3 kinase domain. Although Smad6 regulates BMP signaling through multiple mechanisms, our findings suggest that interaction with type I receptors is a critical step in the function of Smad6.