The TGF-β pathway plays a vital role in development and disease and regulates transcription through a complex composed of receptor-regulated Smads (R-Smads) and Smad4. Extensive biochemical and genetic studies argue that the pathway is activated through R-Smad phosphorylation; however, the dynamics of signaling remain largely unexplored. We monitored signaling and transcriptional dynamics and found that although R-Smads stably translocate to the nucleus under continuous pathway stimulation, transcription of direct targets is transient. Surprisingly, Smad4 nuclear localization is confined to short pulses that coincide with transcriptional activity. Upon perturbation, the dynamics of transcription correlate with Smad4 nuclear localization rather than with R-Smad activity. In Xenopus embryos, Smad4 shows stereotyped, uncorrelated bursts of nuclear localization, but activated R-Smads are uniform. Thus, R-Smads relay graded information about ligand levels that is integrated with intrinsic temporal control reflected in Smad4 into the active signaling complex.