Transforming growth factor beta (TGFbeta) pathways are implicated in metazoan development, adult homeostasis and disease. TGFbeta ligands signal via receptor serine/threonine kinases that phosphorylate, and activate, intracellular Smad effectors as well as other signaling proteins. Oligomeric Smad complexes associate with chromatin and regulate transcription, defining the biological response of a cell to TGFbeta family members. Signaling is modulated by negative-feedback regulation via inhibitory Smads. We review here the mechanisms of TGFbeta signal transduction in metazoans and emphasize events crucial for embryonic development.