The TGF-β signaling pathway regulates cell growth, differentiation, adhesion, motility, and development. TGF-β ligands that induce TGF-β signaling are synthesized in their latent form. Several proteases or cell surface receptors such as integrins act upon the latent form, releasing the active ligand. There are three types of mammalian TGF-βs: (TGF-β1, TGF-β2, and TGF-β3) that bind as homodimers or heterodimers to TGF-β receptors. The TGF-β receptors are of three kinds RI, RII, and RIII. The RI and RII types are dimeric and have a serine/threonine kinase domain in their cytosolic tails. The receptor RIII is a cell-surface proteoglycan with glycosaminoglycan (GAG) chains. The RIII, a transmembrane receptor, binds the ligand first and presents it to the receptor RII. Alternatively, the TGF-β ligand may directly bind the constitutively active RII. RII recruits a nearby RI and phosphorylates it, stimulating its kinase activity. The ligand-mediated oligomerization of the serine/threonine receptors leads to the formation of a tetrameric complex. The activated RI now phosphorylates the signal transducer receptor-activated Smad or R-Smads such as Smad2 or Smad3. This induces conformational changes in R-Smads that unmask their nuclear localization signal (NLS). Two phosphorylated R-Smads form a complex with an unphosphorylated co-Smad such as the Smad4 and are translocated to the nucleus with the help of importins. Inside the nucleus, the trimeric Smad complex associates with transcription factors such as TFE3. They bind gene regulatory sequences and induce gene expression, eliciting an appropriate cellular response.

Once a specific response is produced, the TGF-β signaling pathway is shut off. The inhibitory Smads or I-Smads, such as the Smad6 and Smad7, play an important role in downregulating TGF-β signaling. I-Smads bind to the cytosolic tail of the activated receptor and shut the pathway through three mechanisms:

1. It competes with R-Smads to bind to the receptor and interferes with R-Smad phosphorylation.
2. It recruits Smad ubiquitylation regulatory factors or Smurfs that ubiquitylates the receptor. The ubiquitylated receptor is directed for proteasomal degradation.
3. It directs the protein phosphatase to dephosphorylate the receptor.

These inhibitory Smads also bind the co-Smad, thereby preventing its binding with R-Smads. It directs Smad4 for ubiquitylation and proteasomal digestion, thus inhibiting TGF-β signaling.