Members of the TGF-beta superfamily regulate the growth and differentiation of various types of cells. Smads are recently identified proteins that mediate intracellular signaling of the TGF-beta superfamily. Smads are grouped into three classes depending on their structure and functions. R-Smads are phosphorylated by type I serine-threonine kinase receptors for TGF-beta superfamily members. R-Smads then associate with Co-Smads. Smad4 is the only vertebrate Co-Smad identified thus far, and is required for the signaling pathways of different ligands. The heteromeric Smad complex translocates into the nucleus, where it activates target genes. Anti-Smads inhibit signaling by R-Smads and Co-Smads. Smads bind to DNA directly or indirectly via other DNA binding proteins. R-Smads interact with transcriptional coactivators, and have intrinsic transactivation activity. Elucidation of the functions of Smads will provide the framework for research on TGF-beta superfamily signaling.