Hepatic stellate cells are the primary cell type. responsible for matrix deposition in liver fibrosis, undergoing a process of transdifferentiation into fibrogenic myofibroblasts. These cells, which undergo a similar transdifferentiation process when cultured in vitro, are a major target of the profibrogenic agent transforming growth factor-beta (TGF-beta). We have studied activation of the TGF-beta downstream signaling molecules Smads 2, 3, and 4 in hepatic stellate cells (HSC) cultured in vitro for 1, 4, and 7 days, with quiescent, intermediate, and fully transdifferentiated phenotypes, respectively. Total levels of Smad4, common to multiple TGF-beta superfamily signaling pathways, do not change as HSC transdifferentiate, and the protein is found in both nucleus and cytoplasm, independent of treatment with TGF-beta or the nuclear export inhibitor leptomycin B. TGF-beta mediates activation of Smad2 primarily in early cultured cells and that of Smad3 primarily in transdifferentiated cells. The linker protein SARA, which is required for Smad2 signaling, disappears with transdifferentiation. Additionally, day 7 cells demonstrate constitutive phosphorylation and nuclear localization of Smad 2, which is not affected by pretreatment with TGF-beta-neutralizing antibodies, a type I TGF-beta receptor kinase inhibitor, or activin-neutralizing antibodies. These results demonstrate essential differences between TGF-beta-mediated signaling pathways in quiescent and in vitro transdifferentiated hepatic stellate cells.