BACKGROUND Members of the GATA family of zinc finger transcription factors are genetically controlled "master" regulators of development in the hematopoietic and nervous systems. Whether GATA factors also serve to integrate epigenetic signals on target promoters is, however, unknown. The transforming growth factor-beta (TGF-beta) superfamily is a large group of phylogenetically conserved secreted factors controlling cell proliferation, differentiation, migration, and survival in multiple tissues. RESULTS GATA-3, a key regulator of T helper cell development, was found to directly interact with Smad3, an intracellular signal transducer of TGF-beta. Complex formation required a central region in GATA-3 and the N-terminal domain of Smad3. GATA-3 mediated recruitment of Smad3 to GATA binding sites independently of Smad3 binding to DNA, and the two factors cooperated synergistically to regulate transcription from the IL-5 promoter in a TGF-beta-dependent manner. Treatment of T helper cells with TGF-beta promoted the formation of an endogenous Smad3/GATA-3 nuclear complex and stimulated production of the Th2 cytokine IL-10 in a Smad3- and GATA-3-dependent manner. CONCLUSIONS Although Smad proteins are known to interact with a number of general transcription factors, these are insufficient to explain the tissue-specific biology of TGF-beta proteins. Through its interaction with Smad3, GATA-3 is able to integrate a genetic program of cell differentiation with an extracellular signal, providing a molecular framework for the effects of TGF-beta on the development and function of specific subsets of immune cells and possibly other cell types.