Transforming growth factor-β (TGF-β) and TGF-β-related factors regulate cell growth, differentiation, and apoptosis, and play key roles in normal development and tumorigenesis. TGF-β family-induced changes in gene expression are mediated by serine/threonine kinase receptors at the cell surface and Smads as intracellular effectors. Receptor-activated Smads combine with a common Smad4 to translocate into the nucleus where they cooperate with other transcription factors to activate or repress transcription. The activities of the receptor-activated Smads are controlled by post-translational modifications such as phosphorylation and ubiquitylation. Here we show that Smad4 is modified by sumoylation. Sumoylation of Smad4 was enhanced by the conjugating enzyme Ubc9 and members of the PIAS family of SUMO ligases. A major sumoylation site in Smad4 was localized to Lys-159 in its linker segment with an additional site at Lys-113 in the MH-1 domain. Increased sumoylation in the presence of the PIASγ E3 ligase correlated with targeting of Smad4 to subnuclear speckles that contain SUMO-1 and PIASγ. Replacement of lysines 159 and 113 by arginines or increased sumoylation enhanced the stability of Smad4, and transcription in mammalian cells and Xenopus embryos. These observations suggest a role for Smad4 sumoylation in the regulation of TGF-β signaling through Smads.