TGF-β/Smad signaling pathway plays an important role in EMT during cancer progression. Long non-coding RNAs (lncRNAs) are involved in various behaviors of cancer cells, including EMT. Here, we report a novel lncRNA adjacent to Smad3, named Smad3-associated long non-coding RNA (SMASR). SMASR is downregulated by TGF-β via Smad2/3 in lung cancer cells. Knockdown of SMASR induces EMT and increases the migration and invasion of lung cancer cells. Moreover, knockdown of SMASR promotes the phosphorylation of Smad2/3. Mechanistically, SMASR interacts with Smad2/3 and inhibits the expression of TGFBR1, the TGF-β type I receptor responsible for phosphorylation of Smad2/3, thus leading to inactivation of TGF-β/Smad signaling pathway. Clinically, SMASR is downregulated in lung cancer tissues. Collectively, our findings prove a critical role of SMASR in EMT of lung cancer by forming a negative feedback loop with TGF-β/Smad signaling pathway.