Smad7 is an inhibitory Smad protein that blocks Transforming Growth Factor-beta (TGF-β) signaling through a negative feedback loop, also capable of mediating the crosstalk between TGF-β and other signaling pathways. Smad7 mRNA and protein levels are upregulated after TGF-β signaling; subsequently, Smad7 protein binds TGF-β type I receptor blocking R-Smad phosphorylation and eventually TGF-β signaling. Because of this inhibitory function, Smad7 can antagonize diverse cellular processes regulated by TGF-β such as cell proliferation, differentiation, apoptosis, adhesion and migration. Smad7 induction by different cytokines, besides TGF-β, is also critical for crosstalk/integration of a variety of signaling pathways, and relevant in the pathology of some diseases. Thus, Smad7 plays a key role in the control of various physiological events, and even in some pathological processes including fibrosis and cancer. This review highlights the main known functions of Smad7 with a particular focus on the relevance that alterations of Smad7 function may have in homeostasis, also describing some Smad7 emerging roles in the development of several human diseases that identify this protein as a potential therapeutic target.