Signaling by transforming growth factor (TGF)-beta family members is mediated by Smad proteins that regulate gene transcription through functional cooperativity and association with other DNA-binding proteins. The hypoxia-inducible factor (HIF)-1 is a transcriptional complex that plays a key role in oxygen-regulated gene expression. We demonstrate that hypoxia and TGF-beta cooperate in the induction of the promoter activity of vascular endothelial growth factor (VEGF), which is a major stimulus in the promotion of angiogenesis. This cooperation has been mapped on the human VEGF promoter within a region at -1006 to -954 that contains functional DNA-binding sequences for HIF-1 and Smads. Optimal HIF-1alpha-dependent induction of the VEGF promoter was obtained in the presence of Smad3, suggesting an interaction between these proteins. Consistent with this, co-immunoprecipitation experiments revealed that HIF-1alpha physically associates with Smad3. These results demonstrate that both TGF-beta and hypoxia signaling pathways can synergize in the regulation of VEGF gene expression at the transcriptional level.