The vertebrate homologues of Drosophila dachsund, DACH1 and DACH2, have been implicated as important regulatory genes in development. DACH1 plays a role in retinal and pituitary precursor cell proliferation and DACH2 plays a specific role in myogenesis. DACH proteins contain a domain (DS domain) that is conserved with the proto-oncogenes Ski and Sno. Since the Ski/Sno proto-oncogenes repress AP-1 and SMAD signaling, we hypothesized that DACH1 might play a similar cellular function. Herein, DACH1 was found to be expressed in breast cancer cell lines and to inhibit transforming growth factor-beta (TGF-beta)-induced apoptosis. DACH1 repressed TGF-beta induction of AP-1 and Smad signaling in gene reporter assays and repressed endogenous TGF-beta-responsive genes by microarray analyses. DACH1 bound to endogenous NCoR and Smad4 in cultured cells and DACH1 co-localized with NCoR in nuclear dotlike structures. NCoR enhanced DACH1 repression, and the repression of TGF-beta-induced AP-1 or Smad signaling by DACH1 required the DACH1 DS domain. The DS domain of DACH was sufficient for NCoR binding at a Smad4-binding site. Smad4 was required for DACH1 repression of Smad signaling. In Smad4 null HTB-134 cells, DACH1 inhibited the activation of SBE-4 reporter activity induced by Smad2 or Smad3 only in the presence of Smad4. DACH1 participates in the negative regulation of TGF-beta signaling by interacting with NCoR and Smad4.