Induction of alphaEbeta7 expression on T cells by transforming growth factor (TGF)-beta is thought to be important for intestinal intraepithelial T lymphocyte (IEL) entry into the epithelial compartment. However, there has been no in vivo evidence that up-regulation of alphaEbeta7 expression on T cells by TGF-beta is critical for the selective localization of intestinal IEL in the epithelial area. We have recently established transgenic mice expressing Smad7 under the control of a distal lck promoter where TGF-beta/Smad signaling is specifically blocked in mature T cells. Here we showed that TGF-beta-mediated up-regulation of alphaEbeta7 was impaired on T cells isolated from the Smad7 transgenic mice associated with reduced numbers of intestinal IEL when compared with that in wild-type littermates. These results indicated that failure to induce alphaEbeta7 on T cells by TGF-beta resulted in reduced numbers of intestinal IEL, suggesting the importance of alphaEbeta7 expression by TGF-beta in selective localization of intestinal IEL.