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Excessive accumulation of the extracellular matrix is a hallmark of many inflammatory and fibrotic diseases, including those of the kidney. This study addresses the question whether NO, in addition to inhibiting the expression of MMP-9, a prominent metalloprotease expressed by mesangial cells, additionally modulates expression of its endogenous inhibitor TIMP-1. We demonstrate that exogenous NO has no modulatory effect on the extracellular TIMP-1 content but strongly amplifies the early increase in cytokine-induced TIMP-1 mRNA and protein levels. We examined whether transforming growth factor beta (TGFbeta), a potent profibrotic cytokine, is involved in the regulation of NO-dependent TIMP-1 expression. Experiments utilizing a pan-specific neutralizing TGFbeta antibody demonstrate that the NO-induced amplification of TIMP-1 is mediated by extracellular TGFbeta. Mechanistically, NO causes a rapid increase in Smad-2 phosphorylation, which is abrogated by the addition of neutralizing TGFbeta antisera. Similarly, the NO-dependent increase in Smad-2 phosphorylation is prevented in the presence of an inhibitor of TGFbeta-RI kinase, indicating that the NO-dependent activation of Smad-2 occurs via the TGFbeta-type I receptor. Furthermore, activation of the Smad signaling cascade by NO is corroborated by the NO-dependent increase in nuclear Smad-4 level and is paralleled by increased DNA binding of Smad-2/3 containing complexes to a TIMP-1-specific Smad-binding element (SBE). Reporter gene assays revealed that NO activates a 0.6-kb TIMP-1 gene promoter fragment as well as a TGFbeta-inducible and SBE-driven control promoter. Chromatin immunoprecipitation analysis also demonstrated DNA binding activity of Smad-3 and Smad-4 proteins to the TIMP-1-specific SBE. Finally, by enzyme-linked immunosorbent assay, we demonstrated that NO causes a rapid increase in TGFbeta(1) levels in cell supernatants. Together, these experiments demonstrate that NO by induction of the Smad signaling pathway modulates TIMP-1 expression.