The alteration of p21-activated kinase 4 (PAK4) and transforming growth factor-beta (TGF-β) signaling effector Smad2/3 was detected in several types of tumors, which acts as oncogenic factor and tumor suppressor, but the relationship between these events has not been explored. Here, we demonstrate that PAK4 interacts with and modulates phosphorylation of Smad2/3 via both kinase-dependent and kinase-independent mechanisms, which attenuate Smad2/3 axis transactivation and TGF-β-mediated growth inhibition in gastric cancer cells. First, PAK4 interaction with Smad2/3, which is independent of PAK4 kinase activity, blocks TGF-β1-induced phosphorylation of Smad2 Ser465/467 or Smad3 Ser423/425 and the consequent activation. In addition, PAK4 phosphorylates Smad2 on Ser465, leading to the degradation of Smad2 through ubiquitin-proteasome-dependent pathway under hepatocyte growth factor (HGF) stimulation. Interestingly, PAK4 expression correlates negatively with phospho-Ser465/467 Smad2 but positively with phospho-Ser465 Smad2 in gastric cancer tissues. Furthermore, the expressions of HGF, phospho-Ser474 PAK4 and phospho-Ser465 Smad2 are markedly increased in gastric cancer tissues, and the expression of Smad2 is decreased in gastric cancer tissues. Our results document an oncogenic role of PAK4 in repression of Smad2/3 transactivation that involved in tumorigenesis, and suggest PAK4 as a potential therapeutic target for gastric cancer.