Transforming growth factor-beta is responsible for triggering a cascade of events leading to fibrosis in scleroderma. The Smads are intracellular signal transducers recently shown to mediate fibroblast activation and other profibrotic responses elicited by transforming growth factor-betain vitro . To understand better the involvement of Smads in the pathogenesis of fibrosis, we ex-amined Smad expression and activation in situ in a murine model of scleroderma. Bleomycin injections induced striking dermal infiltration with macrophages by 3 d, and progressive fibrosis by 2 wk. Infiltrating macrophages and resident fibroblasts expressed Smad3, the positive mediator for transforming growth factor-beta responses. Importantly, in bleomycin-injected skin, fibroblasts showed predominantly nuclear localization of Smad3 and intense staining for phospho-Smad2/3. Furthermore, phosphorylated Smad2/3 in fibroblasts was detected even after the resolution of inflammation. Expression of Smad7, the endogenous inhibitor of transforming growth factor-beta/Smad signaling, was strongly induced in dermal cells by transforming growth factor-beta, but not by bleomycin injections. Collectively, these results indicate that bleomycin-induced murine scleroderma is associated with rapid and sustained induction of transforming growth factor-beta/Smad signaling in resident dermal fibroblasts. Despite apparent activation of the intracellular transforming growth factor-beta signaling pathway in the lesional dermis, the expression of transforming growth factor-beta-inducible Smad7 was not upregulated. In light of the critical function of Smad7 as an endogenous inhibitor of Smad signaling that restricts the duration and magnitude of transforming growth factor-beta responses, and as a mediator of apoptosis, relative Smad7 deficiency observed in the present studies may account for sustained activation of transforming growth factor-beta/Smad signaling in lesional tissues. These findings raise the possibility that Smads plays an important part in the pathogenesis of fibrosis, and may therefore represent targets for selective anti-fibrotic interventions.