Regulation of MHC I surface expression by TGF-β is important for controlling cell-mediated immune responses, but how TGF-β downregulates MHC I is unknown. We investigated this mechanism using flow cytometry and RNA-sequencing to identify the major TGF-β signaling pathway and target genes involved. All three isoforms of TGF-β were found to have similar abilities to downregulate constitutive MHC I surface expression. Inhibiting the type I TGF-β receptor, ALK5, as well the canonical TGF-β signaling molecule Smad3, prevented TGF-β from downregulating MHC I surface expression. RNA-sequencing from horse and human mesenchymal stem cells revealed that multiple genes associated with antigen processing and presentation were downregulated in TGF-β-treated cells with B2M and ERAP1 being downregulated in both species. While downregulation of MHC I surface expression a slow process that continued past 24 hours after TGF-β treatment, downregulation of gene expression of ERAP1 occurred within 12 hours after treatment. B2M expression was not consistently downregulated until after 24 hours and TAP2 expression was inconsistent over a 72-hour period, although it was significantly downregulated at 12 hours after TGF-β treatment. This data supports that TGF-β downregulates antigen processing and presentation genes resulting in decreased surface expression of MHC I through a Smad3-dependent mechanism.