Plasminogen activator inhibitor-1 (PAI-1) is a serpin class protease inhibitor that plays a central role in the regulation of vascular function and tissue remodeling by modulating thrombosis, inflammation, and the extracellular matrix. A central mediator controlling PAI-1 is transforming growth factor-beta(TGF-beta), which induces its expression and promotes fibrosis. We have found that a unique member of the Smad family of signal transduction molecules, Smad6s, modulates the expression of PAI-1. Overexpression of Smad6s in endothelial cells increases promoter activity and PAI-1 secretion, and an antisense to Smad6s suppresses the induction of PAI-1 by TGF-beta. The effect of Smad6s on the PAI-1 promoter appeared to be the result of increase binding of the forkhead winged helix factor FoxD1 to a TGF-beta-responsive element. Furthermore, the effect of Smad6s on PAI-1 up-regulation and on FoxD1 binding was found to result from up-regulation of TGF-beta and could be inhibited by the blocking TGF-beta signaling with Smad7. The ability of Smad6s to regulate the TGF-beta promoter and subsequent PAI-1 induction was suppressed by a selective protein kinase C-beta (PKC-beta) inhibitor. Consistent with the in vitro data, we found that increased Smad6s in diseased vessels correlated with increased TGF-beta and PAI-1 levels. Overall, our results demonstrate that the level of Smad6s can alter the level of TGF-beta and the subsequent induction of PAI-1 via a FoxD1 transcription site. Furthermore, our data suggest that this process, which is up-regulated in diseased vessels, can be modulated by the inhibition of PKC-beta.