Mullerian-inhibiting substance (MIS), a transforming growth factor-B family member, activates the nuclear factor-KB (NF-KB) pathway and induces the expression of B-cell translocation gene 2 (BTG2), IFN regulatory factor-1 (IRF-1), and the chemokine Gro-B. Inhibiting NF-KB activation with a phosphorylation-deficient IKBA mutant abrogated MIS-mediated induction of all three genes. Expression of dominant-negative Smad1, in which serines at the COOH-terminal SSVS motif are converted to alanines, suppressed MIS-induced Smad1 phosphorylation and impaired MIS-stimulated Gro-B promoterdriven reporter expression and Gro-B mRNA. Suppressing Smad1 expression using small interfering RNA also mitigated MIS-induced Gro-B mRNA, suggesting that regulation of Gro-B expression by MIS was dependent on activation of NF-KB as well as Smad1. However, induction of IRF-1 and BTG2 mRNAs by MIS was independent of Smad1 activation. Characterization of KB-binding sequences within Gro-B, BTG2, and IRF-1 promoters showed that MIS stimulated binding of p50 and p65 subunits to all three sites, whereas phosphorylated Smad1 (phospho-Smad1) protein was detectable only in the NF-KB complex bound to the KB site of the Gro-B promoter. Consistent with these observations, chromatin immunoprecipitation assays showed recruitment of both phospho-Smad1 and p65 to the Gro-B promoter in vivo, whereas p65, but not phospho-Smad1, was recruited to the BTG2 promoter. These results show a novel interaction between MIS-stimulated Smad1 and NF-KB signaling in which enhancement of NF-KB DNA binding and gene expression by phospho-Smad1 is dependent on the sequence of the KB consensus site within the promoter. [Cancer Res 2007;67(6):2747-56]