We present evidence that Notch4ICD attenuates TGF-beta signaling. Cells expressing the activated form of the Notch4 receptor (ICD4) were resistant to the growth-inhibitory effects of TGF-beta. Notch4ICD was found to bind to Smad2, Smad3 and Smad4 but with higher affinity to Smad3. Deletion analysis showed that binding of Smad3 to ICD4 was mediated by its MH2 domain and was not dependent on the presence of the RAM23 region in ICD4. Using two TGF-beta/Activin reporter luciferase assays, RT-PCR and Western blot analysis, we demonstrate that ICD4 and ICD4 deltaRAM23 inhibit Smad-binding element and 3TP luciferase reporter activity and PAI-1 gene expression. MCF-7 human breast cancer cells express Notch4ICD (ICD4) and are resistant to the growth-inhibitory effects of TGF-beta. Blockage of Notch4 processing to ICD4 by gamma-secretase inhibitor renders MCF-7 cells sensitive to growth inhibition by TGF-beta. The interplay between these two signaling pathways may be a significant determinant during mammary tumorigenesis.