Transforming growth factor-beta (TGF-beta) plays an important role in the pathogenesis of allergic asthma and other airway diseases. Signals from the activated TGF-beta receptor complex are transduced to the nucleus of airway cells by Smad proteins, which represent a family of transcription factors that have recently been implicated to play a major role as intracellular mediators of inflammation. The Smad family consists of the receptor-regulated Smads, a common pathway Smad, and inhibitory Smads. Receptor-regulated Smads (R-Smads) are phosphorylated by the TGF-beta type Ireceptor. They include Smad2 and Smad3, which are recognized by TGF-beta and activin receptors, and Smads 1, 5, 8, and 9, which are recognized by bone morphogenetic protein (BMP) receptors. Smad4 is a common pathway Smad, which is also defined as cooperating Smad (co-Smad) and is not phosphorylated by the TGF-beta type I receptor. Inhibitory Smads(anti-Smads) include Smad6 and Smad7, which down-regulate TGF-beta signaling. To date, the Smads are the only TGF-beta receptor substrates with a demonstrated ability to propagate signals and with regard to the growing number of investigations of Smad-mediated effects in the airways, Smads may prove to be an important target for future development of new therapeutic strategies for asthma and chronic obstructive pulmonary disease.