Smads, key effectors of TGF-, activin and BMP signaling, regulate gene expression and interact with coactivators and corepressors that modulate Smad activity. The corepressor Evi-1 exerts its oncogenic effects by repressing TGF-/Smad3-mediated transcription, thereby blocking TGF--induced growth arrest. Because Evi-1 interacts with the highly conserved MH2 domain of Smad3, we investigated the physical and functional interaction of Evi-1 with Smad1 and Smad2, downstream targets of BMP and activin signaling, respectively. Evi-1 interacted with and repressed the receptor-activated transcription through Smad1 and Smad2, similarly to Smad3. In addition, Evi-1 repressed BMP/Smad1- and activin/Smad2-mediated induction of endogenous Xenopus gene expression, suggesting a role of repression of BMP and activin signals by Evi-1 in vertebrate embryogenesis. Evi-1 also repressed the induction of endogenous Smad7 expression by TGF- family ligands. In the course of these studies, we observed Evi-1 repression of Smad transactivation even when Smad binding to DNA was kept constant. We, therefore, explored the mechanism of Evi-1 repression of TGF--family inducible transcription. Evi-1 repression did not result from displacement of Smad binding to DNA or to CBP, but from the recruitment of Evi-1 by Smad3 and CBP to DNA. Following TGF- stimulation, Evi-1 and the associated corepressor CtBP were recruited to the endogenous Smad7 promoter. Evi-1 recruitment to the promoter decreased TGF--induced histone acetylation, coincident with its repression of Smad7 gene expression. In this way, Evi-1 acts as a general Smad corepressor to inhibit TGF-, activin, and BMP-inducible transcription.