Transforming growth factor beta is a multi-functional growth and differentiation factor responsible for regulating many diverse biological processes in both vertebrate and invertebrate species. Among the most dramatic of TGFbeta's effects are those associated with specification of cell fates during development and inhibition of cell cycle progression. The core TGFbeta signaling pathway has now been described using a synergistic combination of genetic and biochemical approaches. Transmembrane receptors with intrinsic protein serine kinase activity bind ligand in the extracellular milieu and then phosphorylate intracellular proteins known as Smads. Phosphorylated Smads form heterooligomers and translocate into the nucleus where they can modulate transcriptional responses. More recent studies indicate that many other proteins serve as modulators of Smad activity, and utimately define specific cellular responses to TGFbeta. Here we describe both the simplistic core TGFbeta signaling pathway and the growing number of proteins that impinge on this pathway at the level of Smad function to either enhance or inhibit TGFbeta responses.