Smad7 functions as an endogenous negative regulator of TGF-beta/Smad signaling. TGF-beta/Smad pathway is a major regulator of collagen production in connective tissue. Reduced expression of Smad7 has been reported in TGF-beta-mediated fibrotic diseases, characterized by over production of collagen. Solar ultraviolet (UV) irradiation reduces collagen production by fibroblasts in human skin in vivo. We have investigated regulation of Smad7 gene expression by UV irradiation in human skin fibroblasts. UV irradiation transiently increased Smad7 mRNA and protein levels. Induction of Smad7 mRNA and protein was maximal within five hours, and returned to initial basal levels 24 hours post UV. UV irradiation induced Smad7 promoter reporter activity 3-fold. Smad7 promoter contains functional enhancer sequences that bind transcription factors Smad3 and activator protein-1 (AP-1). UV irradiation reduced protein binding to the Smad3 enhancer, and increased binding to the AP-1 enhancer. Deletion of AP-1 binding site in the Smad7 promoter completely abolished UV stimulation of Smad7 transcription. Deletion of Smad3 element had no effect on UV-induced promoter activity. UV irradiation increased mRNA and protein expression of AP-1 family members, c-Jun and c-Fos, which bound to the AP-1 element in the Smad7 promoter. Furthermore, over-expression of dominant negative c-Jun substantially reduced UV induction of Smad7 transcription. These data demonstrate that induction of Smad7 gene expression by UV irradiation is mediated via induction of transcription factor AP-1 in human skin fibroblasts.