SMAD3 is a direct mediator of transcriptional activation by the TGFβ receptor. The activity of SMAD3 is regulated by the TGFβ receptors, and SMAD3 is phosphorylated and associated with the ligand-bound receptor complex. TGFβ stimulation leads to phosphorylation and activation of SMAD3, which form a complex with SMAD4 that accumulate in the nucleus and regulate transcription of target genes such as CDK inhibitor. SMAD3 containing a C-terminal truncation acts as a dominant-negative inhibitor of the normal TGFβ response. SMAD3 is a major physiologic substrate of the G1 cyclin-dependent kinases CDK4 and CDK2.