Previous results have suggested that Smad1 transduces signals in response to bone morphogenetic proteins (BMPs), but not in response to transforming growth factor beta (TGF-beta). Here we investigated the ability of TGF-beta to regulate Smad1 phosphorylation, hetero-oligomerization with Smad4, translocation to the nucleus, and transcriptional activation of 3TP-luciferase reporter activity in TGF-beta- and BMP-responsive Hs578T human breast cancer cells. We demonstrate that Smad1 was rapidly phosphorylated in vivo in response to both TGF-beta3 and BMP2 as determined using an antibody against the epitope-tagged Smad1 being expressed. In addition, both TGF-beta3 and BMP2 increased Smad1-Smad4 hetero-oligomerization in Hs578T cells. Visualization of Smad1 nuclear translocation with the aid of green fluorescent protein (GFP) in live cells demonstrated nuclear accumulation of GFP-Smad1 fluorescence in response to either TGF-beta or BMP2 stimulation. After ligand stimulation, approximately 60-70% of transfected cells displayed prominent nuclear fluorescence. Expression of Smad1 in Hs578T cells increased the activity of the TGF-beta-responsive reporter 3TP-Lux. Moreover, TGF-beta treatment further potentiated the effect of Smad1 on 3TP-luciferase activity. Collectively, our results demonstrate that TGF-beta as well as BMP can signal through Smad1.