Telomerase underpins stem cell renewal and proliferation and is required for most neoplasia. Recent studies suggest that hormones and growth factors play physiological roles in regulating telomerase activity. In this report we show a rapid repression of the telomerase reverse transcriptase (TERT) gene by transforming growth factor beta (TGF-beta) in normal and neoplastic cells by a mechanism depending on the intracellular signaling protein Smad3. In human breast cancer cells TGF-beta induces rapid entry of Smad3 into the nucleus where it binds to the TERT gene promoter and represses TERT gene transcription. Silencing Smad3 gene expression or genetically deleting the Smad3 gene disrupts TGF-beta repression of TERT gene expression. Expression of the Smad3 antagonist, Smad7, also interrupts TGF-beta-mediated Smad3-induced repression of the TERT gene. Mutational analysis identified the Smad3 site on the TERT gene promoter, mediating TERT repression. In response to TGF-beta, Smad3 binds to c-Myc; knocking down c-Myc, Smad3 does not bind to the TERT gene, suggesting that c-Myc recruits Smad3 to the TERT promoter. Thus, TGF-beta negatively regulates telomerase activity via Smad3 interactions with c-Myc and the TERT gene promoter. Modifying the interaction between Smad3 and TERT gene may, thus, lead to novel strategies to regulate telomerase.