The study investigates the role of the N domain of Smad7 in the specific inhibition of transforming growth factor-β (TGF-β) signaling. Smad7 and Smad6 are inhibitory Smads (I-Smads) that repress TGF-β and bone morphogenetic protein (BMP) signaling. Using deletion mutants and chimeras, the researchers found that the N domain of Smad7 is essential for its potent inhibition of TGF-β signaling, while the MH2 domains of both Smad6 and Smad7 are responsible for inhibiting BMP signaling. The N domain of Smad7 interacts with the MH2 domain of Smad7, enhancing the inhibitory activity through improved interaction with TGF-β receptors. This interaction is crucial for the efficient inhibition of TGF-β signaling. Additionally, the N domain of Smad7 determines the subcellular localization of I-Smads, with Smad7 predominantly located in the cytoplasm in some cell types. The study highlights the importance of the N domain in the specific inhibition of TGF-β signaling and provides insights into the mechanisms by which I-Smads regulate signaling pathways.The study investigates the role of the N domain of Smad7 in the specific inhibition of transforming growth factor-β (TGF-β) signaling. Smad7 and Smad6 are inhibitory Smads (I-Smads) that repress TGF-β and bone morphogenetic protein (BMP) signaling. Using deletion mutants and chimeras, the researchers found that the N domain of Smad7 is essential for its potent inhibition of TGF-β signaling, while the MH2 domains of both Smad6 and Smad7 are responsible for inhibiting BMP signaling. The N domain of Smad7 interacts with the MH2 domain of Smad7, enhancing the inhibitory activity through improved interaction with TGF-β receptors. This interaction is crucial for the efficient inhibition of TGF-β signaling. Additionally, the N domain of Smad7 determines the subcellular localization of I-Smads, with Smad7 predominantly located in the cytoplasm in some cell types. The study highlights the importance of the N domain in the specific inhibition of TGF-β signaling and provides insights into the mechanisms by which I-Smads regulate signaling pathways.