We previously identified constitutive Smad signaling in human melanoma cells despite resistance to transforming growth factor-beta (TGF-beta) control of cell proliferation. This led us to investigate the effect of inhibitory Smad7 overexpression on melanoma cell behavior. Using the highly metastatic cell line, 1205-Lu, we thus generated melanoma cell clones constitutively expressing Smad7, and their mock-transfected counterparts. Stable expression of Smad7 resulted in an inhibition of constitutive Smad2/3 phosphorylation, and in a reduced TGF-beta response of Smad3/Smad4-driven gene transactivation, as measured using transfected Smad3/4-specific reporter gene constructs. Smad7 overexpression, however, did not alter their proliferative capacity and resistance to TGF-beta-driven growth inhibition. On the other hand, expression of Smad7 efficiently reduced the capacity of human melanoma cells to invade Matrigel in Boyden migration chambers, while not affecting their motility and adhesion to collagen and laminin. Gelatin zymography identified reduced MMP-2 and MMP-9 secretion by Smad7-expressing melanoma cells as compared with their control counterparts. Smad7-expressing melanoma cells exhibited a dramatically reduced capacity to form colonies under anchorage-independent culture conditions, and, when injected subcutaneously into nude mice, were largely delayed in their ability to form tumors. These results suggest that TGF-beta production by melanoma cells not only affects the tumor environment but also directly contributes to tumor cell aggressiveness through autocrine activation of Smad signaling.