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Signal transduction by the TGF-β family involves sets of receptor serine/threonine kinases, Smad proteins that act as receptor substrates, and Smad-associated transcription factors that target specific genes. We have identified discrete structural elements that dictate the selective interactions between receptors and Smads and between Smads and transcription factors in the TGF-β and BMP pathways. A cluster of four residues in the L45 loop of the type I receptor kinase domain, and a matching set of two residues in the L3 loop of the Smad carboxy-terminal domain establish the specificity of receptor–Smad interactions. A cluster of residues in the highly exposed α-helix 2 of the Smad carboxy-terminal domain specify the interaction with the DNA-binding factor Fast1 and, as a result, the gene responses mediated by the pathway. By establishing specific interactions, these determinants keep the TGF-β and BMP …