We report that K5.Smad7 mice, which express a Smad7 transgene under the control of a keratin 5 promoter, were resistant to radiation-induced oral mucositis, a painful oral ulceration. In addition to nuclear factor κB (NF-κB) activation, which is known to contribute to oral mucositis, we found activated transforming growth factor β (TGF-β) signaling in cells from this condition. Smad7 dampened both pathways to attenuate inflammation, growth inhibition and apoptosis. Additionally, Smad7 promoted oral epithelial migration to close the wound. Further analyses revealed that TGF-β signaling Smads and their co-repressor C-terminal binding protein 1 (CtBP1) transcriptionally repressed Rac1, and that Smad7 abrogated this repression. Knocking down Rac1 expression in mouse keratinocytes abrogated Smad7-induced migration. Topical application of Smad7 protein conjugated with a cell-permeable Tat tag to oral mucosa showed prophylactic and therapeutic effects on radiation-induced oral mucositis in mice. Thus, we have identified new molecular mechanisms involved in oral mucositis pathogenesis, and our data suggest an alternative therapeutic strategy to block multiple pathological processes in this condition.