Transforming growth factor-β (TGFβ) signaling involves activation of a number of signaling pathways, several of which are controlled by phosphorylation events. Here, we describe a phosphoproteome profiling of MCF-7 human breast epithelial cells treated with TGFβ1. We identified 32 proteins that change their phosphorylation upon treatment with TGFβ1; 26 of these proteins are novel targets of TGFβ1. We show that Smad2 and Smad3 have different effects on the dynamics of TGFβ1-induced protein phosphorylation. The identified proteins belong to nine functional groups, e.g., proteins regulating RNA processing, cytoskeletal rearrangements, and proteasomal degradation. To evaluate the proteomics findings, we explored the functional importance of TGFβ1-dependent phosphorylation of one of the targets, i.e., transcription factor-II-I (TFII-I). We confirmed that TGFβ1 stimulated TFII-I phosphorylation at serine residues 371 and 743. Abrogation of the phosphorylation by replacement of Ser371 and Ser743 with alanine residues resulted in enhanced complex formation between TFII-I and Smad3, and enhanced cooperation between TFII-I and Smad3 in transcriptional regulation, as evaluated by a microarray-based measurement of expression of endogenous cyclin D2, cyclin D3, and E2F2 genes, and by a luciferase reporter assay. Thus, TGFβ1-dependent phosphorylation of TFII-I may modulate TGFβ signaling at the transcriptional level.