It is now generally accepted that transforming growth factor-beta (TGF-beta) has an important role in the pathogenesis of both acute and chronic forms of renal disease. Although TGF-beta's potent fibrogenic activity is considered a major factor in chronic progression of renal disease, this cytokine participates in the control of several fundamental cellular responses in the kidney including inflammation, programmed cell death, cell growth, cell differentiation, and cellular hypertrophy. Recent identification of Smad proteins as intracellular mediators of TGF-beta signaling has provided important insights into mechanisms that may determine the specificity of TGF-beta action in different renal and inflammatory cells. Thus, Smads are characterized by an astonishingly complex array of molecular and functional interactions with other signaling pathways. These emerging patterns of signaling cross talk involving Smad proteins suggest a dynamic profile of positive or negative transmodulation of TGF-beta signaling, depending on the cellular context. Understanding the interplay between these signaling cascades is an important field of investigation that will ultimately reveal new targets for precise and selective modulation of TGF-beta's diverse actions in renal diseases.