T helper 17 (TH17) cells are critically involved in host defence, inflammation, and autoimmunity. Transforming growth factor β (TGFβ) is instrumental in TH17 cell differentiation by cooperating with interleukin-6 (refs 6, 7). Yet, the mechanism by which TGFβ enables TH17 cell differentiation remains elusive. Here we reveal that TGFβ enables TH17 cell differentiation by reversing SKI-SMAD4-mediated suppression of the expression of the retinoic acid receptor (RAR)-related orphan receptor γt (RORγt). We found that, unlike wild-type T cells, SMAD4-deficient T cells differentiate into TH17 cells in the absence of TGFβ signalling in a RORγt-dependent manner. Ectopic SMAD4 expression suppresses RORγt expression and TH17 cell differentiation of SMAD4-deficient T cells. However, TGFβ neutralizes SMAD4-mediated suppression without affecting SMAD4 binding to the Rorc locus. Proteomic analysis revealed that SMAD4 interacts with SKI, a transcriptional repressor that is degraded upon TGFβ stimulation. SKI controls histone acetylation and deacetylation of the Rorc locus and TH17 cell differentiation via SMAD4: ectopic SKI expression inhibits H3K9 acetylation of the Rorc locus, Rorc expression, and TH17 cell differentiation in a SMAD4-dependent manner. Therefore, TGFβ-induced disruption of SKI reverses SKI-SMAD4-mediated suppression of RORγt to enable TH17 cell differentiation. This study reveals a critical mechanism by which TGFβ controls TH17 cell differentiation and uncovers the SKI-SMAD4 axis as a potential therapeutic target for treating TH17-related diseases.