The tumor suppressor, Smad4/DPC4, is a common signal transducer in transforming growth factor- (TGF-) signaling. In this study, we demonstrated that the protein inhibitor of activated STAT1 (PIAS1) regulates the signaling potential of Smad4 through a sumoylation-dependent mechanism. PIAS1 was shown to be an E3 ligase for Smad4 sumoylation in vitro and in vivo. The ubiquitin/proteasome pathway controls the turnover of products of many oncogenes and tumor suppressor genes and thus plays a major role in cancer development (1-5). Recently, a number of ubiquitin-related proteins have also been found in eukaryotic cells. These proteins, including the small ubiquitinlike modifier 1 (SUMO1), 1 utilize a conjugation system that is similar to ubiquitination (6, 7). In particular, SUMO is activated in an ATP-dependent manner by an E1 enzyme consisting of the Aos1/Uba2 heterodimer and then transferred to the SUMO-conjugating E2 enzyme Ubc9 and subsequently ligated to the substrate. In contrast to ubiquitination, SUMO1 modifications of target proteins do not promote their degradation. Furthermore, SUMO1 modification reduces ubiquitination of tumor suppressor Smad4 (8) and may also preclude ubiquitination of I B (9). The functional consequences of SUMO1 modification vary depending on the target. For example, SUMO1 conjugation is necessary for RanGAP1 localization to the nuclear pore complex (10, 11), for nuclear import of the transcription corepressor CtBP (12), and for localization of promyelocytic leukemia to the nuclear bodies (13). For many other proteins, their covalent modifications by SUMO1 modulate their biological activities (7, 14 -19).Substrates of SUMO conjugation often contain a tetrapeptide motif, i.e. KX(D/E) (where is hydrophobic and X is any amino acid). Structural analysis of the complex between Ubc9 and its substrate, RanGAP1, demonstrates clearly how the motif is specifically recognized by Ubc9 and elucidates nicely why RanGAP1 sumoylation may not depend on an E3 ligase (20). However, more recent reports support the presence of E3 enzymes for sumoylation (21-24). In particular, a family of SUMO E3 ligases, termed protein inhibitors of activated STAT (PIAS), has recently been discovered (21,22). The PIAS protein family consists of five members: PIAS1, PIAS3, PIASx␣, PIASx, and PIASy. PIAS1 and PIAS3 were originally shown to interact with STAT1 and STAT3, respectively, and inhibit their functions (25,26). Recently other PIAS proteins have been shown to function as coregulators for nuclear receptors (27-32). The first demonstration of a mammalian PIAS protein as a SUMO E3 ligase was shown in the involvement of PIAS1 in p53 sumoylation (33). PIAS proteins resemble the RING-class ubiquitin E3 ligases and bind to Ubc9 through the RING finger domain (34). The RING finger domain is highly conserved among PIAS proteins and is supported by the observation that, similar to PIAS1, PIASx also promotes the sumoylation of CtBP (12), p53, and c-Jun (35). Although PIASx␣ binds to the androgen receptor through the RING ...