Id1 is a member of the inhibitor of differentiation (Id) protein family that regulates a wide range of cell functions. Previous studies have shown that expression of the Id1 gene is down-regulated by TGF-beta in epithelial cells, whereas it is up-regulated by BMP in a variety of cell types. During our study of the biological function of TGF-beta1, we found that Id1 can be strongly up-regulated by TGF-beta1 in the human mammary gland epithelial cell line MCF10A. Quantitative real-time RT-PCR has revealed as high as 7.5-fold induction of Id1 mRNA by TGF-beta1 in MCF10A cells after 1 h of TGF-beta1 stimulation, and this induction does not require de novo protein synthesis. Using Smad knockdown and knockout approaches, we have identified Smad3 as the responsible R-Smad for mediating transcriptional activation of the Id1 gene. Chromatin immunoprecipitation assay confirms that Smad3 and Smad4 bind to the upstream region of the Id1 gene. Our results demonstrate that Smad3, but not Smad2, mediates TGF-beta1-dependent early transcriptional induction of Id1.