Smad transcription factors lie at the core of one of the most versatile cytokine signaling pathways in metazoan biology—the transforming growth factor-β (TGFβ) pathway. Recent progress has shed light into the processes of Smad activation and deactivation, nucleocytoplasmic dynamics, and assembly of transcriptional complexes. A rich repertoire of regulatory devices exerts control over each step of the Smad pathway. This knowledge is enabling work on more complex questions about the organization, integration, and modulation of Smad-dependent transcriptional programs. We are beginning to uncover self-enabled gene response cascades, graded Smad response mechanisms, and Smad-dependent synexpression groups. Our growing understanding of TGFβ signaling through the Smad pathway provides general principles for how animal cells translate complex inputs into concrete behavior.