Acute kidney injury, often caused by an ischemic insult, is associated with significant short-term morbidity and mortality, and increased risk of chronic kidney disease. The factors affecting the renal response to injury following ischemia and reperfusion remain to be clarified. We found that the Stem cell antigen-1 (Sca-1), commonly used as a stem cell marker, is heavily expressed in renal tubules of the adult mouse kidney. We evaluated its potential role in the kidney using Sca-1 knockout mice submitted to acute ischemia reperfusion injury (IRI), as well as cultured renal proximal tubular cells in which Sca-1 was stably silenced with shRNA. IRI induced more severe injury in Sca-1 null kidneys, as assessed by increased expression of Kim-1 and Ngal, rise in serum creatinine, abnormal pathology, and increased apoptosis of tubular epithelium, and persistent significant renal injury at day 7 post IRI, when recovery of renal function in control animals was nearly complete. Serum creatinine, Kim-1 and Ngal were slightly but significantly elevated even in uninjured Sca-1-/- kidneys. Sca-1 constitutively bound both TGFβ receptors I and II in cultured normal proximal tubular epithelial cells. Its genetic loss or silencing lead to constitutive TGFβ receptor-mediated activation of canonical Smad signaling even in the absence of ligand and to KIM-1 expression in the silenced cells. These studies demonstrate that by normally repressing TGFβ-mediated canonical Smad signaling, Sca-1 plays an important in renal epithelial cell homeostasis and in recovery of renal function following ischemic acute kidney injury.