The balance between matrix metalloproteinases (MMPs) and their inhibitors, the tissue inhibitors of metalloproteinases (TIMPs), is pivotal in the remodeling of extracellular matrix. TGF-ß has profound effects on extracellular matrix homeostasis, in part via its ability to alter this balance at the level of gene expression. The intracellular signaling pathways by which TGF-ß mediates its actions include the Smad pathway, specific to the TGF-ß superfamily, but also, for example, mitogen-activated protein kinase pathways; furthermore, cross-talk between the Smads and other signaling pathways modifies the TGF-ß response. The reciprocal effect of TGF-ß on the expression ofTimp-1 and MMP-1 supports its role in matrix anabolism, yet the mechanisms by which TGF-ß inducesTimp-1 and represses induced MMP-1 have remained opaque. Here, we (i) investigate the mechanism(s) by which TGF-ß1 induces expression of the Timp-1 gene and (ii) compare this with TGF-ß1 repression of phorbol ester-inducedMMP-1 expression. We report that the promoter-proximal activator protein 1 (AP1) site is essential for the response of bothTimp-1 and MMP-1 to TGF-ß (induction and repression, respectively). c-Fos, JunD, and c-Jun are essential for the induction of Timp-1 gene expression by TGF-ß1, but these AP1 factors transactivate equally well from both Timp-1 andMMP-1 AP1 sites. Smad-containing complexes do not interact with the Timp-1 AP1 site, and overexpression of Smads does not substitute or potentiate the induction of the gene by TGF-ß1; furthermore, Timp-1 is still induced by TGF-ß1 in Smad knockout cell lines, although to varying extents. In contrast, Smads do interact with the MMP-1 AP1 site and mediate repression of induced MMP-1 gene expression by TGF-ß1.