To investigate the mechanism underlying myofibroblast differentiation induced by transforming growth factor (TGF) beta1 in obliterative bronchiolitis following lung transplantation.Heterotopic tracheal transplantation was performed in Smad3 wild-type and knock-out mice to simulate the lung transplantation in human. Murine tracheal fibroblasts cultivated in primary culture were used for in vitro study. Immunohistochemistry, immunocytochemistry, Western Blotting, RT-PCR and DNA electrophoresis mobility gel shift assay were conducted to detect the expression of alpha-smooth muscle actin (alphaSMA), the marker of fibroblast-myofibroblast differentiation, and the activation of Smad3, p38 and ERK1/2.In affected airways of experimental obliterative bronchiolitis, abundant expression of alphaSMA were found. In vitro study for tracheal fibroblasts, the activation of Smad3 by TGF-beta1 presents as three major forms, phosphorylation, nuclear translocation and DNA binding. In Smad3 wild-type fibroblasts, TGF-beta1 induces the increase of the myofibroblasts transformation, characterized by the elevation of alphaSMA, both at transcription and protein level. While in Smad3 knock-out fibroblasts, the transformation of myofibroblasts induced by TGF-beta1 is significantly decreased (t = 2.080, P = 0.027; t = 1.982, P = 0.032), but not completely abolished. Further study in Smad3-deficient fibroblasts demonstrates that p38 and ERK1/2 could be activated by TGF-beta1 and result in fibroblast differentiation.TGF-beta1 could promote the transformation of fibroblasts into myofibroblasts in Smad3 dependent and independent signal pathways, especially the Smad3 dependent path, and result in the development of obliterative bronchiolitis.