Although tumor necrosis factor (TNF) induces apoptosis and cell death in many tumor cells, some cancer cells are still resistant to the TNF-induced death signal. In this report, we showed that Smad7, an inhibitory Smad of transforming growth factor-beta (TGF-beta) signaling, can overcome the TNF resistance in human breast and gastric cancer cells. Overexpression of Smad7 induces the degradation of poly(ADP-ribose) polymerase and the activation of caspase cascade. Although c-Jun NH2-terminal kinase (JNK) signaling is involved in TNF-induced cell death, the expression of Smad7 does not synergize the activation of JNK. However, the activation of nuclear factor-kappaB (NF-kappaB), the cell survival factor, is markedly decreased in Smad7-stable cells. Furthermore, the expression of antiapoptotic target genes of NF-kappaB is significantly reduced in accordance with the level of Smad7. In addition, Smad7 mediates the inhibitory activity of TGF-beta on TNF-induced NF-kappaB activation and the synergistic activity of TGF-beta on TNF-induced apoptosis. These findings suggest that Smad7 sensitizes the tumor cells to TNF-induced apoptosis through the inhibition of expression of antiapoptotic NF-kappaB target genes.