Mutations in TRPS1 cause tricho-rhino-pharyngeal syndrome (TRPS). Trps1 is essential for nephron development, acting downstream of Bmp7. Because Bmp7 counteracts epithelial-to-mesenchymal transition (EMT) and reverses chronic renal injury, we examined the function of Trps1 in renal fibrosis. Immunohistochemistry revealed Trps1 expression in proximal tubular epithelial cells of mice. Unilateral ureteral obstruction reduced mRNA and protein expression of Trps1 in wild-type and heterozygous Trps1-knockout (Trps1(+/-)) mice. Trps1 haploinsufficiency promoted tubulointerstitial fibrosis via increased phosphorylation of Smad3 and decreased Smad7 protein. In primary culture, Trps1 deficiency promoted TGF-beta1-mediated EMT in proximal tubule cells. Trps1(+/-)-derived cells had higher levels of phosphorylated Smad3, and TGF-beta1 induced a time-dependent decrease in Smad7 protein in wild-type and Trps1(+/-) kidneys. In addition, compared with wild-type cells, Trps1(+/-) cells had double the amount of the E3 ubiquitin ligase Arkadia, and TGF-beta1 induced further Arkadia expression. Furthermore, knockdown of Arkadia inhibited TGF-beta1-induced EMT in Trps1(+/-) cells. Collectively, these data suggest that Trps1 haploinsufficiency enhances TGF-beta1-induced EMT and tubulointerstitial fibrosis by modulating the amount of Smad7 through Arkadia/ubiquitin-mediated degradation.