Background Smad proteins play a key role in TGF-β signaling that regulates cell proliferation, differentiation, and apoptosis. Mice deficient in Smad3 develop colonic adenocarcinoma. Materials and methods We developed a Smad3-deficient colonocyte cell line that was used to study TGF-β-mediated growth inhibition and induction of apoptosis was compared to young adult mouse colonocyte (YAMC) control cells. Growth inhibition was assessed by cell count and (3H)-thymidine incorporation assay. Transcriptional response to TGF-β was measured by transfecting the reporters p3TP-Lux and p(CAGA) 9-MLP-luc. TGF-β-induced apoptosis was assessed using ELISA and Hoechst staining. Mediators of cell-cycle arrest and apoptosis were assayed by Western blot. Results Smad3-/- cells were resistant to TGF-β-mediated growth inhibition compared to control cells. Ninety-eight percent of cell count growth inhibition observed in YAMC cells, while 34% inhibition was observed in Smad3-/- cells after TGF-β treatment. (3H)-thymidine incorporation was inhibited by 61% in YAMC cells, while Smad3-/- cells showed 25% inhibition after TGF-β treatment. Smad3-/- cells were deficient in luciferase reporter induction by TGF-β. TGF-β induced apoptosis 8-fold in YAMC cells, but had no effect on apoptosis in Smad3-/- cells. p21 Cip11 and PAI-1 are induced in YAMC cells by TGF-β, but unchanged in Smad3-/- cells. TGF-β decreases cyclin D1 levels in YAMC cells but does not affect levels in Smad3-/- cells. Conclusions Our findings suggest that the loss of Smad3 contributes to resistance of TGF-β growth inhibition and apoptosis in colonic epithelium. This may represent a mechanism by which cells are able to escape antiproliferative controls and embark on a pathway toward neoplasia. © 2004 Elsevier Inc. All rights reserved.