BAMBI is a transmembrane glycoprotein related to the transforming growth factor-beta (TGF-beta)-family type I receptors and functions as a negative regulator of TGF-beta signaling during development. BAMBI is induced by BMP signaling through the evolutionary conserved BMP-responsive elements in its promoter. Furthermore, we have recently shown that Wnt/beta-catenin signaling activates transcription of BAMBI and that BAMBI expression is aberrantly elevated in most colorectal carcinomas. Here, we show that BAMBI is also directly induced by TGF-beta signaling, through the three tandem repeats of 13 bp sequences containing the SMAD-binding elements, which are distinct from the BMP-responsive element. Our findings suggest that BAMBI transcription is regulated by TGF-beta signaling through direct binding of SMAD3 and SMAD4 to the BAMBI promoter.