The TGF-beta superfamily members have important roles in controlling patterning and tissue formation in both invertebrates and vertebrates. Two types of signal transducers, receptors and Smads, mediate the signaling to regulate expression of their target genes. Despite of the relatively simple signal transduction pathway, many modulators have been found to contribute to a tight regulation of this pathway in a variety of mechanisms. This article reviews the negative regulation of TGF-beta signaling with focus on its roles in vertebrate development.