Smad2 and Smad3 interact and mediate TGF-beta signaling. Although Smad3 promotes fibrosis, the role of Smad2 in fibrogenesis is largely unknown. In this study, conditional deletion of Smad2 from the kidney tubular epithelial cells markedly enhanced fibrosis in response to unilateral ureteral obstruction. In vitro, Smad2 knockdown in tubular epithelial cells increased expression of collagen I, collagen III, and TIMP-1 and decreased expression of the matrix-degrading enzyme MMP-2 in response to TGF-beta1 compared with similarly treated wild-type cells. We obtained similar results in Smad2-knockout fibroblasts. Mechanistically, Smad2 deletion promoted fibrosis through enhanced TGF-beta/Smad3 signaling, evidenced by greater Smad3 phosphorylation, nuclear translocation, promoter activity, and binding of Smad3 to a collagen promoter (COL1A2). Moreover, deletion of Smad2 increased autoinduction of TGF-beta1. Conversely, overexpression of Smad2 attenuated TGF-beta1-induced Smad3 phosphorylation and collagen I matrix expression in tubular epithelial cells. In conclusion, in contrast to Smad3, Smad2 protects against TGF-beta-mediated fibrosis by counteracting TGF-beta/Smad3 signaling.