Cytokines of the transforming growth factor β (TGF-β) superfamily, including TGF-βs, activins and bone morphogenetic proteins (BMPs), bind to specific serine/threonine kinase receptors and transmit intracellular signals through Smad proteins. Upon ligand stimulation, Smads move into the nucleus and function as components of transcription complexes. TGF-β and BMP signaling is regulated positively and negatively through various mechanisms. Positive regulation amplifies signals to a level sufficient for biological activity. Negative regulation occurs at the extracellular, membrane, cytoplasmic and nuclear levels. TGF-β and BMP signaling is often regulated through negative feedback mechanisms, which limit the magnitude of signals and terminate signaling. Negative regulation is also important for formation of gradients of morphogens, which is crucial in developmental processes. In addition, other signaling pathways regulate TGF-β and BMP signaling through cross-talk. Nearly 20 BMP isoforms have been identified, and their activities are regulated by various extracellular antagonists. Regulation of TGF-β signaling might be tightly linked to tumor progression, since TGF-β is a potent growth inhibitor in most cell types.