Transforming growth factor-beta superfamily member signals are conveyed through cell-surface serine/threonine kinase receptors to the intracellular mediators known as Smads. Activation of Smads causes their translocation from the cytoplasm to the nucleus where they function to control gene expression. In this review we will focus on proteins that modulate Smad activity, including SARA, for Smad Anchor for Receptor Activation, which functions during the initiation of signalling and on components of the ubiquitin-proteasome pathway, such as Smurf1, which can negatively regulate Smad signalling. In addition, we will summarize recent findings on the role of Smads as transcriptional co-modulators.