Transforming growth factor (TGF)-beta has been implicated in immunosuppression. However, it remains obscure whether regulation of T cells by TGF-beta contributes to the immunosuppression in vivo. To address this issue, we developed transgenic mice expressing Smad7, an intracellular antagonist of TGF-beta/Smad signaling, selectively in mature T cells using a plasmid construct coding a promoter element (the distal lck promoter) that directs high expression in peripheral T cells. Peripheral T cells were not growth inhibited by TGF-beta in Smad7 transgenic mice. Although Smad7 transgenic mice did not spontaneously show a specific phenotype, antigen-induced airway inflammation and airway reactivity were enhanced in Smad7 transgenic mice associated with high production of both T helper cell type 1 (Th1) and Th2 cytokines. Thus, blockade of TGF-beta/Smad signaling in mature T cells by expression of Smad7 enhanced airway inflammation and airway reactivity, suggesting that regulation of T cells by TGF-beta was crucial for negative regulation of the inflammatory (immune) response. Our findings also implicated TGF-beta/Smad signaling in mature T cells as a regulatory component of allergic asthma.