The Bone Morphogenetic Proteins (BMPs) regulate early embryogenesis and morphogenesis of multiple organs, such as bone, kidney, limbs and muscle. Smad1 is one of the key signal transducers of BMPs and is responsible for transducing receptor activation signals from the cytoplasm to the nucleus, where Smad1 serves as a transcriptional regulator of various BMP-responsive genes. Based upon the ability of Smad1 to bind multiple proteins involved in proteasome-mediated degradation pathway, we investigated whether Smad1 could be a substrate for proteasome. We found that Smad1 is targeted to proteasome for degradation in response to BMP type I receptor activation. The targeting of Smad1 to proteasome involves not only the receptor activation-induced Smad1 ubiquitination but also the targeting functions of the ornithine decarboxylase antizyme and the proteasome b subunit HsN3. Our studies provide the first evidence for BMP-induced proteasomal targeting and degradation of Smad1 and also reveal new players and novel mechanisms involved in this important aspect of Smad1 regulation and function.