Smad proteins mediate transforming growth factor-beta (TGF-beta) signaling to regulate cell growth and differentiation. SnoN is an important negative regulator of TGF-beta signaling that functions to maintain the repressed state of TGF-beta target genes in the absence of ligand. On TGF-beta stimulation, Smad3 and Smad2 translocate into the nucleus and induce a rapid degradation of SnoN, allowing activation of TGF-beta target genes. We show that Smad2- or Smad3-induced degradation of SnoN requires the ubiquitin-dependent proteasome and can be mediated by the anaphase-promoting complex (APC) and the UbcH5 family of ubiquitin-conjugating enzymes. Smad3 and to a lesser extent, Smad2, interact with both the APC and SnoN, resulting in the recruitment of the APC to SnoN and subsequent ubiquitination of SnoN in a destruction box (D box)-dependent manner. In addition to the D box, efficient ubiquitination and degradation of SnoN also requires the Smad3 binding site in SnoN as well as key lysine residues necessary for ubiquitin attachment. Mutation of either the Smad3 binding site or lysine residues results in stabilization of SnoN and in enhanced antagonism of TGF-beta signaling. Our studies elucidate an important mechanism and pathway for the degradation of SnoN and more importantly, reveal a novel role of the APC in the regulation of TGF-beta signaling.