Epithelial to mesenchymal transdifferentiation is a novel mechanism that promotes renal fibrosis and here we investigated whether known causes of renal fibrosis (angiotensin II and transforming growth factor beta, TGFbeta) act through this pathway. We infused angiotensin II into rats for 1 day and found that it activated the Smad pathway which persisted for up to 2 weeks in chronically infused rats. Renal TGF-beta mRNA expression was increased at 3 days and its protein at 2 weeks suggesting Smad pathway activation occurred earlier than TGF-beta upregulation. In cultured human tubuloepithelial cells, angiotensin II caused a rapid activation of Smad signaling independent of TGF-beta however, Smad-dependent transcription after 1 day was TGF-beta mediated. Two weeks of angiotensin II infusion activated genes associated with epithelial mesenchymal transdifferentiation. Stimulation with angiotensin II for 3 days caused transdifferentiation of the cultured epithelial cells by TGF-beta-mediated processes; however, early changes were independent of endogenous TGF-beta. Smad7 overexpression, which blocks Smad2/3 activation, diminished angiotensin II-induced epithelial mesenchymal transdifferentiation. Our results show that angiotensin II activates the Smad signaling system by TGF-beta-independent processes, in vivo and in vitro, causing renal fibrosis.