Atopic dermatitis (AD) is a common chronic inflammatory skin disease characterized by itchy, dry, and inflamed skin. Transforming growth factor (TGF)-beta is an important fibrogenic and immunomodulatory factor that regulates cellular processes in the injured and inflamed skin. This study examines the role of the TGF-beta-Smad signaling pathway using Smad3-deficient mice in a murine model of AD. Dermatitis was induced in mice by epicutaneous application of ovalbumin (OVA) applied in a patch to tape-stripped skin. OVA-specific IgE and IgG2a antibody levels were measured by ELISA. Skin biopsies from sensitized skin areas were used for RNA isolation, histology, and immunohistochemical examination. The thickness of dermis was significantly reduced in OVA-sensitized skin of Smad3-/- mice. The defect in the dermal thickness was accompanied by a decrease in the expression of mRNA for proinflammatory cytokines IL-6 and IL-1beta in the OVA-sensitized skin. In contrast, the number of mast cells was significantly increased in OVA-sensitized skin of Smad3-/- mice, which also exhibited elevated levels of OVA-specific IgE. These results demonstrate that the Smad3-pathway regulates allergen-induced skin inflammation and systemic IgE antibody production in a murine model AD. The Smad3 signaling pathway might be a potential target in the therapy of allergic skin diseases.