Members of the transforming growth factor-beta (TGF-beta) family, which includes the activins, relay signals from serine/threonine kinase receptors in membrane to nucleus via intracellular Sma- and Mad-related (Smad) proteins. Inhibitory Smad proteins were found to prevent the interaction between the serine/threonine kinase receptors and pathway-restricted Smad proteins. Smad7 was identified as a TGF-beta-inducible antagonist of TGF-beta signaling, and it may participate in a negative feedback loop to control TGF-beta signaling. Here we demonstrate that the mRNA expression of Smad7 is induced by activin A in mouse B cell hybridoma HS-72 cells, which undergo growth arrest and apoptosis upon exposure to activin A. The ectopic expression of mouse Smad7 in HS-72 cells suppressed the activin A-induced cell cycle arrest in the G1 phase by abolishing the activin A-induced expression of p21(CIP1/WAF1) and hypophosphorylation of retinoblastoma protein. Furthermore, Smad7 expression suppressed activin A-induced apoptosis in HS-72 cells. Thus, our data indicate that Smad7 is an activin A-inducible antagonist of activin A-induced growth arrest and apoptosis of B lineage cells.