Glucocorticoids play pivotal roles in the maintenance of homeostasis but, when dysregulated, may also have deleterious effects. Smad6, one of the transforming growth factor beta (TGFbeta) family downstream transcription factors, interacts with the N-terminal domain of the glucocorticoid receptor (GR) through its Mad homology 2 domain and suppresses GR-mediated transcriptional activity in vitro. Adenovirus-mediated Smad6 overexpression inhibits glucocorticoid action in rat liver in vivo, preventing dexamethasone-induced elevation of blood glucose levels and hepatic mRNA expression of phosphoenolpyruvate carboxykinase, a well known rate-limiting enzyme of liver gluconeogenesis. Smad6 suppresses GR-induced transactivation by attracting histone deacetylase 3 to DNA-bound GR and by antagonizing acetylation of histone H3 and H4 induced by p160 histone acetyltransferase. These results indicate that Smad6 regulates glucocorticoid actions as a corepressor of the GR. From our results and known cross-talks between glucocorticoids and TGFbeta family molecules, it appears that the anti-glucocorticoid actions of Smad6 may contribute to the neuroprotective, anticatabolic and pro-wound healing properties of the TGFbeta family of proteins.