Smad family members are newly identified essential intracellular signalling components of the transforming growth factor-beta (TGF-beta) superfamily. Smad2 and Smad3 are structurally highly similar and mediate TGF-beta signals. Smad4 is distantly related to Smads 2 and 3, and forms a heteromeric complex with Smad2 after TGF-beta or activin stimulation. Here we show that Smad2 and Smad3 interacted with the kinase-deficient TGF-beta type I receptor (TbetaR)-I after it was phosphorylated by TbetaR-II kinase. TGF-beta1 induced phosphorylation of Smad2 and Smad3 in Mv1Lu mink lung epithelial cells. Smad4 was found to be constitutively phosphorylated in Mv1Lu cells, the phosphorylation level remaining unchanged upon TGF-beta1 stimulation. Similar results were obtained using HSC4 cells, which are also growth-inhibited by TGF-beta. Smads 2 and 3 interacted with Smad4 after TbetaR activation in transfected COS cells. In addition, we observed TbetaR-activation-dependent interaction between Smad2 and Smad3. Smads 2, 3 and 4 accumulated in the nucleus upon TGF-beta1 treatment in Mv1Lu cells, and showed a synergistic effect in a transcriptional reporter assay using the TGF-beta-inducible plasminogen activator inhibitor-1 promoter. Dominant-negative Smad3 inhibited the transcriptional synergistic response by Smad2 and Smad4. These data suggest that TGF-beta induces heteromeric complexes of Smads 2, 3 and 4, and their concomitant translocation to the nucleus, which is required for efficient TGF-beta signal transduction.