We have previously shown that keratinocyte-specific deletion of Smad4, a TGFbeta/Activin/BMP signaling mediator, results in a progressive alopecia. To further assess the molecular mechanisms of Smad4 loss-mediated alopecia, we examined expression levels of key molecules associated with hair follicle differentiation in Smad4-deleted skin. Among them, Desmoglein 4 (Dsg4) was down-regulated in Smad4-deleted skin prior to the onset of hair follicle abnormalities with gradual depletion coinciding with hair follicle degeneration. Chromatin immunoprecipitation (ChIP) assay showed that Smad4, together with the BMP mediators Smad1 and Smad5, but not the TGFbeta/Activin mediators Smad2 or Smad3, bound to the Smad Binding Element (SBE) of the Dsg4 promoter. A Dsg4 reporter assay revealed that Smad4 was required for the maximal transactivation of Dsg4 in cooperation with Smad1 and Smad5. Mutating the SBE of the Dsg4 promoter abrogated Smad4 transactivation of Dsg4. Furthermore, BMP ligands, but not ligands of TGFbeta and Activin, induced endogenous Dsg4 expression. Our data demonstrate that in the presence of Smad4, BMP signaling participated in transcriptional regulation of Dsg4. Thus, Smad4 loss-associated Dsg4 depletion contributed, at least in part, to hair follicles degeneration in Smad4 deficient skin.