Transforming growth factor-β (TGF-β) promotes extracellular matrix deposition by down-regulating the expression of matrix degrading proteinases and upregulating their inhibitors. Tissue inhibitor of metalloproteinases (TIMP)-3 is an ECM-associated specific inhibitor of matrix degrading metalloproteinases. Here, we have characterized the signaling pathways mediating TGF-β-induced expression of TIMP-3. Basal and TGF-β-induced TIMP-3 mRNA expression was abolished in Smad4-deficient mouse embryonic fibroblasts and restoring Smad4 expression rescued the response. Inhibition of Smad signaling by expression of Smad7 and dominant negative Smad3 completely abolished TGF-β-elicited expression of TIMP-3 in human fibroblasts, whereas overexpression of Smad3 enhanced it. Inhibition of extracellular signal-regulated kinase 1/2 (ERK1/2) activation with PD98059 and p38 mitogen-activated protein kinase activity by SB203580 resulted in suppression of TGF-β-induced TIMP-3 expression, indicating that ERK1/2 and p38 MAPK mediate the effect of TGF-β on TIMP-3 expression. Specific activation of p38α and ERK1/2 by constitutively active mutants of MKK3b or MEK1, respectively, and simultaneous co-expression of Smad3 resulted in induction of TIMP-3 expression in the absence of TGF-β indicating that Smad3 co-operates with p38 and ERK1/2 in the induction of TIMP-3 expression. These results demonstrate the complex interplay between Smad3, p38α, and ERK1/2 signaling in the regulation of TIMP-3 gene expression in fibroblasts, which may play a role in inflammation, tissue repair, and fibrosis.