TGFbeta induces hepatocyte apoptosis via reactive oxygen species (ROS) generation, the mitochondrial permeability transition (MPT), and caspase activation. The role of the Smad pathway in these events is unknown. In this study primary hepatocytes were isolated from Smad3 wild-type (+/+) and knockout (-/-) mice, and were treated with TGFbeta (5ng/ml) and/or trolox (2mM). ROS generation, MPT, TGFbeta-dependent transcription, and apoptosis were assessed in the presence or absence of Smad3 wild-type (WT) and dominant-negative (DN) plasmids. With TGFbeta treatment, Smad3 (-/-) hepatocytes did not generate ROS activity, exhibit MPT, activate caspases, or undergo apoptosis when compared to Smad 3 (+/+) hepatocytes. Similarly, transfection of Smad3 (+/+) hepatocytes with DN-Smad3 inhibited TGFbeta-mediated transcription, ROS generation, MPT, and apoptosis. However, Smad3 (-/-) cells transfected with WT-Smad3 and treated with TGFbeta demonstrated increased transcriptional activity, the MPT, and TGFbeta-induced apoptosis. TGFbeta-mediated ROS generation occurred through an NADPH-like oxidase pathway since diphenyleneiodonium chloride inhibited ROS induction. In conclusion, TGFbeta-induced hepatocyte apoptosis occurs through Smad3 dependent activation of ROS with subsequent activation of the MPT and caspases.