Calcineurin is an important regulator of extracellular matrix (ECM) accumulation in the kidney but functions in a cell-specific manner. Previously, we identified a novel role for calcineurin in mesangial cells where calcineurin activity is required for TGFbeta-mediated induction of fibronectin expression. In this study, we examined the role of the calcineurin substrate NFATc in transcriptional regulation of fibronectin. First, inhibition of calcineurin blocks TGFbeta induction of the fibronectin promoter. Moreover, expression of constitutively active calcineurin in mesangial cells is sufficient to increase fibronectin transcription. Next, inhibition of the calcineurin substrate NFATc1 blocked TGFbeta-mediated activation of the fibronectin promoter. Finally, stable expression of a dominant-negative NFATc protein reduced transcriptional activation of the promoter and inhibited TGFbeta-mediated fibronectin expression. In conclusion, TGFbeta activation of calcineurin in mesangial cells results in regulation of ECM accumulation at least in part by direct transcriptional activity of NFATc on the fibronectin promoter.