Preterm infants may be at risk of necrotizing enterocolitis (NEC) due to deficiency of transforming growth factor-β 2 (TGF-β(2)) in the developing intestine. We hypothesized that low epithelial TGF-β(2) expression in preterm intestine and during NEC results from diminished autocrine induction of TGF-β(2) in these cells. Premature baboons delivered at 67% gestation were treated per current norms for human preterm infants. NEC was diagnosed by clinical and radiological findings. Inflammatory cytokines, TGF-β(2), Smad7, Ski, and strawberry notch N (SnoN)/Ski-like oncoprotein (SKIL) was measured using quantitative reverse transcriptase-polymerase chain reaction, immunoblots, and immunohistochemistry. Smad7 effects were examined in transfected IEC6 intestinal epithelial cells in vitro. Findings were validated in archived human tissue samples of NEC. NEC was recorded in seven premature baboons. Consistent with existing human data, premature baboon intestine expressed less TGF-β(2) than term intestine. TGF-β(2) expression was regulated in epithelial cells in an autocrine fashion, which was interrupted in the premature intestine and during NEC due to increased expression of Smad7. LPS increased Smad7 binding to the TGF-β(2) promoter and was associated with dimethylation of the lysine H3K9, a marker of transcriptional silencing, on the nucleosome of TGF-β(2). Increased Smad7 expression in preterm intestine was correlated with the deficiency of SnoN/SKIL, a repressor of the Smad7 promoter. Smad7 inhibits autocrine expression of TGF-β(2) in intestinal epithelial cells in the normal premature intestine and during NEC. Increased Smad7 expression in the developing intestine may be due to a developmental deficiency of the SnoN/SKIL oncoprotein.