TGF-β (transforming growth factor β) plays a variety of cellular functions mainly through the Smad pathway. Phosphorylation of the carboxyl SXS motif in R-Smads (Smad2 and Smad3) by the type I receptor TβRI is a key step for their activation. It has been reported that the serine/threonine kinase PAK2 (p21-activated kinase 2) can mediate TGF-β signaling in mesenchymal cells. Here, we report that PAK2 restricts TGF-β-induced Smad2/3 activation and transcriptional responsiveness in MDCK epithelial cells. Mechanistically, PAK2 associates with Smad2 and Smad3 in a kinase activity-dependent manner and blocks their activation. PAK2 phosphorylates Smad2 at Ser-417, which is adjacent to the L3 loop that contributes to the TβRI-R-Smad association. Consistently, substitution of Ser-417 with glutamic acid attenuates the interaction of Smad2 with TβRI. Together, our results indicate that PAK2 negatively modulate TGF-β signaling by attenuating the receptor-Smad interaction and thus Smad activation.