Smad proteins mediate genomic responses to polypeptides of the transforming growth factor type beta (TGF-beta) family, affecting cellular proliferation and differentiation, adhesion, and death. Members of one class of these Smad proteins, the receptor-regulated Smads or R-Smads, accumulate in the nucleus on their activation by ligand-bound complexes of serine-threonine kinase receptors at the cell surface. These effector proteins then participate directly in the regulation of gene expression by binding to DNA, interacting with transcription factors, and recruiting corepressors or coactivators to specific promoters. Although many nuclear Smad-interacting factors were isolated during the last 3 years, the field has recently taken a step beyond the characterization of the activity of these Smad-containing complexes on gene expression in vitro, as it addresses now their contribution to many processes in vivo. We have selected examples of such recent progress to illustrate the remarkable variation in the molecular mechanisms underlying Smad-dependent signaling depending on the non-Smad partner in the nucleus and their relevance to normal embryogenesis and consequences of their deregulation in human disorders and pathology.