Transforming growth factor (TGF)-beta3 is an important contributor to the regulation of medial edge epithelium (MEE) disappearance during palatal fusion. SMAD2 phosphorylation in the MEE has been shown to be directly regulated by TGF-beta3. No phospho-SMAD2 was identified in the MEE in Tgf-beta3-null mutant mice (Tgf-beta3-/-), which was correlated with the persistence of the MEE and failure of palatal fusion. In the present study, the cleft palate phenotype in Tgf-beta3-/- mice was rescued by overexpression of a Smad2 transgene in Keratin 14-synthesizing MEE cells following mating Tgf-beta3 heterozygous mice with Keratin 14 promoter directed Smad2 transgenic mice (K14-Smad2). Success of the rescue could be attributed to the elevated phospho-SMAD2 level in the MEE, demonstrated by two indirect evidences. The rescued palatal fusion in Tgf-beta3-/-/K14-Smad2 mice, however, never proceeded to the junction of primary and secondary palates and the most posterior border of the soft palate, despite phospho-SMAD2 expression in these regions at the same level as in the middle portion of the secondary palate. The K14-Smad2 transgene was unable to restore all the functional outcomes of TGF-beta3. This may indicate an anterior-posterior patterning in the palatal shelves with respect to TGF-beta3 signaling and the mechanism of secondary palatal fusion.