We previously demonstrated in T47D cells transfected to express the transforming growth factor-β receptor type II (TGF-βRII) that insulin-like growth factor binding protein-3 (IGFBP-3) could stimulate Smad2 and Smad3 phosphorylation, potentiate TGF-β1-stimulated Smad phosphorylation, and cooperate with exogenous TGF-β1 in cell growth inhibition (Fanayan, S., Firth, S. M., Butt, A. J., and Baxter, R. C. (2000) J. Biol. Chem. 275, 39146-39151). This study further explores IGFBP-3 signaling through the Smad pathway. Like TGF-β1, natural and recombinant IGFBP-3 stimulated the time- and dose-dependent phosphorylation of TGF-βRI as well as Smad2 and Smad3. This effect required the presence of TGF-βRII. IGFBP-3 mutated in carboxyl-terminal nuclear localization signal residues retained activity in TGF-βRI and Smad phosphorylation, whereas IGFBP-5 was inactive. Immunoneutralization of endogenous TGF-β1 suggested that TGF-β1 was not essential for IGFBP-3 stimulation of this pathway, but it increased the effect of IGFBP-3. IGFBP-3, like TGF-β1, elicited a rapid decline in immunodetectable Smad4 and Smad4-Smad2 complexes. IGFBP-3 and nuclear localization signal mutant IGFBP-3 stimulated the activation of the plasminogen activator inhibitor-1 promoter but was not additive with TGF-β, suggesting that this end point is not a direct marker of the IGFBP-3 effect on cell proliferation. This study defines a signaling pathway for IGFBP-3 from a cell surface receptor to nuclear transcriptional activity, requiring TGF-βRII but not dependent on the nuclear translocation of IGFBP-3. The precise mechanism by which IGFBP-3 interacts with the TGF-β receptor system remains to be established.